HELENA — Montana’s preliminary general fund balance at the end of June was $457.1 million — about $268 million more than the 2011 Legislature projected when it developed its two-year budget, the legislature’s chief revenue forecaster said.
The state general fund’s revenue collections totaled $1.88 billion during Fiscal Year 2012, Legislative fiscal analyst Terry Johnson told members of the Revenue and Transportation Interim Committee on Thursday.
Individual income taxes brought in $889 million, which was $89.5 million more than lawmakers had estimated, Lee Newspapers of Montana reported. Property taxes brought in $236 million and corporate taxes were nearly $128 million, about $12.8 million more than expected.
Lawmakers had anticipated a general fund balance of $188.9 million in mid-2012 and cut state spending to meet those estimates under the state constitution’s requirement for a balanced budget.
Gov. Brian Schweitzer and Democrats had argued the estimates did not take into account the improving economy.
Republican leaders argued that the national and state economies had been unpredictable and they feared a second recession so they wanted to constrain spending.
Johnson told lawmakers Thursday the projected general fund balance for June 2013 is now $412.5 million, which is $262 million more than the Legislature predicted.
Rep. Mike Miller, R-Helmville, urged caution in the face of the improved revenue estimates. He noted that in July 2008, the projected state general fund surplus was at $700 million, but it plunged when the recession hit.
Rep. Dick Barrett, D-Missoula, asked Johnson if it wasn’t possible the estimated ending fund balances could continue to increase. Johnson said that was possible.
Sen. Bruce Tutvedt, R-Kalispell, reminded lawmakers that the state pensions for teachers and public employees have unfunded liabilities and potential deficits topping $3 billion in 30 years. An earlier legislative study concluded that the state would have to spend $116 million a year for the next 30 years to remedy the shortfall.
“We haven’t got that retirement elephant in the room in this report,” Tutvedt said.
Schweitzer has proposed that both employees and their state and local government employers to pay more into the system. His proposal also would earmark increased revenue from some natural resource development to fix the problem.