INTRODUCED BY HARRINGTON

WHEREAS, Article VI, section 9, of the Montana Constitution requires the Governor to submit to the Legislature a budget for the ensuing fiscal period, containing in detail for all operating funds the proposed expenditures and estimated revenue of the state; and

WHEREAS, Article VIII, section 9, of the Montana Constitution prohibits the Legislature from appropriating funds in excess of the anticipated revenue of the state; and

WHEREAS, section 5-18-107(5), MCA, requires the Revenue Oversight Committee to estimate the amount of revenue projected to be available for legislative appropriation and to introduce legislation setting forth the Committee's current revenue estimate for the biennium; and

WHEREAS, section 5-12-302(7), MCA, requires the Legislative Fiscal Analyst to assist the Revenue Oversight Committee in its revenue estimating duties; and

WHEREAS, because of the complexity of the myriad variables involved in revenue forecasting and the diversity of sources from which state revenue is obtained, it is increasingly difficult to project revenue in order to prepare a balanced budget for the ensuing biennium; and

WHEREAS, the revenue estimates contained in this resolution provide the basis for a comprehensive analysis of the state's financial condition; and

WHEREAS, it is in the best interests of the state that revenue forecasts be discussed and arrived at in public hearings at which all interested parties may attend and participate.

NOW, THEREFORE, BE IT RESOLVED BY THE SENATE AND THE HOUSE OF REPRESENTATIVES OF THE STATE OF MONTANA:

That the state general fund revenue for fiscal years 1997, 1998, and 1999 be estimated to be $982,821,000, $1,028,146,000, and $1,056,108,000, respectively.

BE IT FURTHER RESOLVED, that the Legislature accept for budget purposes the unreserved fund balance of $30,145,000 for the general fund, prepared according to generally accepted accounting principles as published in the audited state financial statements as of June 30, 1996.

BE IT FURTHER RESOLVED, that the Governor's Office of Budget and Program Planning use the revenue estimates (and the underlying assumptions) contained in this resolution as the official revenue estimates for fiscal years 1997-98 and 1998-99.

GENERAL FUND REVENUE

The projections for total general fund revenue during the 1998-99 biennium are based on an assumption of a continuation of Montana law as it existed on January 1, 1997.

The revenue estimates contained in the following tables are based on the assumptions stated previously in this resolution and those listed in the following tables.y ECONOMIC ASSUMPTIONS

Revenue Oversight Committee

Year Assumption 1996 1997 1998 1999

Montana Population & Employment

CY Population July 1 (Millions) 0.886 0.901 0.917 0.934

CY Nonfarm Employment (Thousands) 358.300 366.000 373.900 382.000

Montana Income

CY Total Personal Income (Millions) $16,551.630 $17,349.705 $18,189.688 $19,098.768

CY Net Farm Income (Millions) $503.363 $514.746 $536.271 $536.039

CY Wage & Salary Income (Millions) $8,092.569 $8,482.358 $8,897.264 $9,336.430

Individual Income Tax

CY Wage & Salary Growth (Percent Change) 5.14% 4.82% 4.89% 4.94%

CY Interest/Dividend Growth (Percent Change) 4.43% 4.26% 2.94% 2.31%

CY Net Business Income (Percent Change) 3.80% 3.60% 2.50% 1.60%

CY Capital Gains/Losses Income (Percent Change) 5.00% 5.00% 5.00% 5.00%

CY Rent/Royalty/Partnership Income (Percent Change) 3.40% 3.80% 4.90% 5.80%

CY All Other Income (Percent Change) 6.93% 5.59% 5.77% 6.25%

FY Individual Income Tax Audits (Millions) $10.318 $11.238 $12.199 $12.541

Corporate Income Tax

CY US Corporate Profits Before Taxes (Billions) $621.600 $644.100 $660.100 $670.400

CY MT Corporate Taxable Income (Millions) $851.240 $854.163 $868.360 $891.854

FY Corporate Income Tax Audits (Millions) $7.972 $8.222 $8.447 $8.214

Inflation & Interest Rates

CY Consumer Price Index (Percent Change) 2.89% 2.68% 2.73% 2.72%

CY Short-Term Interest Rate (Percent) 5.20% 5.04% 4.91% 4.90%

CY Long-Term Interest Rate (Percent) 7.38% 6.61% 6.35% 6.31%

FY Short-Term Interest Rate (Percent) 5.47% 5.12% 4.98% 4.91%

FY Long-Term Interest Rate (Percent) 7.45% 7.00% 6.48% 6.33%

FY TCA Average Yield (Percent) 5.49% 5.51% 5.31% 5.31%

FY TCA Average Balance w/Trans (Millions) $296.929 $275.296 $272.851 $265.363

FY TRANS Issue Size (Millions) $101.200 $59.500 $59.500 $59.500

FY Permanent Trust Gains/Losses (Millions) $0.363 $0.363 $0.363 $0.363

FY Treasure State Endowment Gains/Losses (Millions) $0.000 $0.000 $0.000 $0.000

FY Common School Trust Gains/Losses (Millions) $0.196 $0.173 $0.185 $0.179

FY Resource Indemnity Trust Gains/Losses (Millions) $0.235 $0.235 $0.235 $0.235

FY Parks Trust Gains/Losses (Millions) $0.000 $0.000 $0.000 $0.000

FY Arts Trust Gains/Losses (Millions) $0.000 $0.000 $0.000 $0.000

Natural Resource Tax

CY Severance Tax Oil Production (Million Barrels) 15.339 14.843 14.405 14.070

CY Montana Oil Price (Per Barrel) $18.035 $17.649 $17.625 $18.244

CY Severance Tax Coal Production (Million Tons) 32.352 35.499 35.707 35.692

CY Montana Coal Price (CSP/Ton) $7.356 $7.340 $7.217 $7.073

CY Severance Tax Natural Gas Production (MMCF) 54.436 54.480 54.712 54.902

CY Montana Natural Gas Price (Per MCF) $1.393 $1.183 $1.098 $1.167

CY Copper Production (Million lbs.) 102.144 90.261 98.521 98.521

CY Silver Production (Million ozs.) 1.385 1.411 1.451 1.451

CY Gold Production (Million ozs.) 0.298 0.304 0.375 0.375

CY Lead Production (Million lbs.) 10.250 10.250 10.250 10.250

CY Zinc Production (Million lbs.) 25.500 25.500 25.500 25.500

CY Molybdenum Production (Million lbs.) 10.021 10.617 9.170 9.170

CY Palladium Production (Million ozs.) 0.211 0.307 0.368 0.368

CY Platinum Production (Million ozs.) 0.064 0.093 0.112 0.112

CY Nickel Production (Million lbs.) 0.000 0.000 0.000 0.000

CY Rhodium Production (Million ozs.) 0.000 0.000 0.000 0.000

CY Copper Price (Per lb.) $0.900 $0.900 $0.900 $0.900

CY Silver Price (Per oz.) $5.000 $5.000 $5.000 $5.000

CY Gold Price (Per oz.) $380.000 $380.000 $380.000 $380.000

CY Lead Price (Per lb.) $0.300 $0.300 $0.300 $0.300

CY Zinc Price (Per lb.) $0.450 $0.450 $0.450 $0.450

CY Molybdenum Price (Per lb.) $2.500 $2.500 $2.500 $2.500

CY Palladium Price (Per oz.) $150.000 $150.000 $150.000 $150.000

CY Platinum Price (Per oz.) $425.000 $425.000 $425.000 $425.000

CY Nickel Price (Per lb.) $3.000 $3.000 $3.000 $3.000

CY Rhodium Price (Per oz.) $725.000 $725.000 $725.000 $725.000

CY Total Metal Value (Millions) $310.718 $330.560 $378.596 $378.596

FY Total Federal Forest Receipts (Millions) $42.223 $33.136 $28.000 $28.000

Property Value

FY Total Statewide Taxable Valuation (Millions) $1,813.439 $1,842.380 $2,227.536 $2,257.149

FY Net/Gross Proceeds Taxable Valuation (Millions) $13.252 $16.753 $13.781 $14.460

FY All Other Taxable Valuation (Millions) $1,800.187 $1,825.627 $2,213.755 $2,242.689

FY Statewide Vehicle Value (Millions) $2,745.651 $2,926.120 $3,113.584 $3,308.910

Consumption Tax

FY Liquor Unit Sales (Millions) $5.528 $5.052 $5.052 $5.052

FY Liquor Cost Per Unit $9.506 $10.495 $10.721 $10.972

FY Liquor Net Sales (Millions) $40.644 $37.454 $38.263 $39.158

FY Liquor Operations Budget (Millions) $3.033 $1.607 $1.624 $1.640

FY Beer Barrels (Millions) 0.774 0.784 0.793 0.802

FY Wine Liters (Millions) 5.334 5.341 5.348 5.355

FY Cigarette Packs (Millions) 75.979 73.448 71.001 68.636

FY Tobacco Value (Millions) $12.636 $13.613 $14.651 $15.754

FY Gallons of Gasoline (Millions) 488.855 493.744 498.681 503.668

FY Gallons of Diesel (Millions) 257.207 259.779 262.377 265.001

FY Video Machine Net Income (Millions) $213.565 $222.301 $231.432 $241.245

FY Total Lottery Sales (Millions) $31.761 $30.795 $29.858 $28.949

FY Insurance Premiums Growth (Percent Change) 7.60% 4.88% 4.82% 4.77%

FY Insurance Premiums Tax Credit (Millions) $3.357 $2.524 $1.995 $1.793

FY Police & Firemen Retirement (Millions) $9.866 $10.140 $10.415 $10.698

FY Telephone Taxable Income (Millions) $261.607 $294.736 $301.722 $308.872

FY Kilowatt Hours Produced (Millions) 18,322.356 19,817.529 21,318.646 21,239.246

Other

FY Medicaid Reimbursements (Millions) $13.035 $13.397 $13.759 $14.134

FY Montana Development Center Debt Service (Millions) $0.000 $1.090 $1.092 $1.091

Current Law

General Fund Revenue Estimates

(In Millions of Dollars)

Actual Estimated Estimated Estimated

Source of Revenue FY 1996 FY 1997 FY 1998 FY 1999

Individual Income Tax $350.161 $367.864 $383.561 $401.044

Corporation Income Tax 59.337 59.947 61.043 61.514

Long-Range Bond Excess 52.369 51.704 53.145 54.753

TCA Interest Earnings 16.294 15.162 14.490 14.101

Permanent Trust Interest Earnings 41.532 41.969 42.611 43.218

Coal Severance Tax 9.714 10.006 10.403 10.240

Oil Severance Tax 9.730 10.175 9.745 9.645

Metalliferous Mines Tax 4.026 3.038 3.235 3.703

Natural Gas Severance Tax 0.936 0.877 0.778 0.776

Electrical Energy Tax 3.520 3.635 3.910 3.895

Telephone License Tax 5.712 5.305 5.431 5.560

Railroad Car Tax 0.780 4.457 1.103 1.103

Insurance Premiums Tax 26.133 28.438 30.612 32.525

Institution Reimbursements 16.142 15.471 15.803 16.193

Video Gaming Tax 10.666 11.115 11.572 12.062

Inheritance Tax 15.404 13.575 13.914 14.262

Liquor Excise Tax 7.203 6.636 6.779 6.938

Liquor Profits 6.300 6.322 5.455 5.604

Beer Tax 1.356 1.372 1.389 1.405

Wine Tax 0.846 0.835 0.836 0.837

Driver's License Fee 2.574 2.681 2.721 2.765

Vehicle Fee 4.805 5.121 5.449 5.791

Motor Vehicle License Fee 9.801 9.841 9.814 9.820

Contractor's Gross Receipts Tax 1.621 1.507 1.565 1.520

All Other Revenue 27.298 28.979 26.784 27.559

40-Mill Property Tax 81.754 75.962 85.158 84.381

55-Mill Property Tax 122.329 128.398 149.329 151.318

1.5-Mill Property Tax 0.000 1.101 1.242 1.260

Lottery Profit 7.859 7.736 7.266 6.838

Common School Interest & Income 42.032 42.493 42.238 43.998

US Federal Royalty 24.959 21.099 20.765 21.480

Total General Fund Revenue $963.193 $982.821 $1,028.146 $1,056.108

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