Montana Revenue Projections Indicate Growth on the Heels of Declines in 2016
By law, Montana is obligated to have a balanced budget, but to have a budget that fits revenue can be tricky, and it requires the state to make fairly accurate revenue projections. This year, the Legislative Fiscal Division predicts that state revenues will grow between 2017 and 2019. This optimistic forecast comes on the heels of 2016, which is a difficult year to interpret. Bureau of Business and Economic Research Director Patrick Barkey, says revenues for the state this year, look like a recession, but the answer to why they were down isn’t entirely clear.
"They're negative," said Barkey. "If you are going to look at fiscal 2009 and fiscal 2010, those are both years, especially fiscal 2010, which straddled calendar. That was a situation where revenues were down approaching $150 million. I think the revenue decline in fiscal 2016 was on the order of $75 million."
Barkey says the drop in revenue for 2016 was pushed by a number of factors, but that Individual Income Tax returns were particularly “weak,” and the answer as to why is hard to ascertain.
"We are left to speculate how much of that is due to downturns in the energy industries and how much of that is due to things that don't really have anything to do with the job market, even things like pension disbursement." Barkey said. "There are a lot of things that go into that. It is a hard number so there is no inaccuracy in the data, but the difficulty is interpreting what it means."
This time around, Governor Steve Bullock’s office is projecting a jump in revenue from 2.1 billion dollars to 2.45 billion dollars. The forecast assumes what all Republican and Democratic Legislators hope, that Montana’s economy will grow stronger over the next biennium.