June 1999

Members of the Fifty-Sixth Legislature
Members of the Legislative Finance Committee

In accordance with the provisions of Section 5-12-302, MCA, I am submitting the Legislative Fiscal Report for the 2001 biennium. The reports provides an overview and details of the 2001 biennium budget for the State of Montana approved by the 56th Legislature.

This Overview Volume provides a general summary of the entire 2001 Biennium state budget as well as significant fiscal policy addressed by the 1999 Legislature. In addition, Volumes 1 and 2 provide a detailed summary of the major general fund revenue sources and trust funds as well as details on the appropriations for each agency and program contained in the general appropriations act (House Bill 2) and in other legislation.

These volumes are intended as a reference document and historical archive of legislative budget action for the use of legislators, the public, and state agencies.

Respectfully submitted,

//s//
Clayton Schenck
Legislative Fiscal Analyst

GENERAL GOVERNMENT & TRANSPORTATION
Greg DeWitt - Legislative Branch, Consumer Counsel, Montana Chiropractic Legal Panel, Transportation
Skip Culver - Judiciary
Jim Turner - Governor's Office, Secretary of State, Commissioner of Political Practices, State Auditor's Office, Revenue, Administration, Appellate Defender Commission

NATURE RESOURCES & COMMERCE
Roger Lloyd - Fish, Wildlife, and Parks, Environmental Quality, Natural Resources and Conservation
Taryn Purdy - Livestock, Agriculture
Greg DeWitt - Commerce

HEALTH & HUMAN SERVICES
Lois Steinbeck, Lorene Thorson - Public Health and Human Services

CORRECTIONS & PUBLIC SAFETY
Robert "Skip" Culver - Board of Crime Control, Justice, Public Service Regulation, Corrections
Greg DeWitt - Military Affairs
Lorene Thorson - Labor and Industry

EDUCATION
Taryn Purdy - Office of Public Instruction, Board of Public Education, School for the Deaf and Blind, Montana Arts Council, Library Commission, Montana Historical Society
Sandy Whitney - Commissioner of Higher Education, Community Colleges, Six University Units and College of Technology, Agricultural Experiment Station, Extension Service, Forestry and Conservation Experiment Station, Bureau of Mines and Geology, Fire Services Training School

LONG-RANGE PLANNING
Pam Joehler - Long-Range Building Program, Treasure State Endowment Program, Oil Overcharge Funds, State Building Energy Conservation, Resource Indemnity Trust Interest Accounts, Cultural and Aesthetic Grant Program, Information Technology Bond Proposal

REVENUE ESTIMATING & MONITORING
Terry Johnson
Jim Standaert

INFORMATION TECHNOLOGY
Terry Johnson
Mary Longmaid

Purpose of the Report
The Purpose of the Legislative Fiscal Report is to report to the 1999 Legislature and all interested parties on the fiscal actions of the 1999 legislature and the fiscal status of state government through the 2001 biennium. It accomplishes this purpose by: 1) reporting on appropriations to and revenues of state government as determined by the legislature; and 2) discussing other fiscal issues pertaining to the state's fiscal status.

How to Use this Report
Volumes 1 and 2 discuss the revenue forecasts adopted by the legislature, as well as tax policies and initiatives enacted by the legislature. These volumes also contain appropriations and policy decisions pertaining to state agency programs. In contrast, this volume (the "Overview") presents a broader fiscal overview and summarizes significant fiscal actions having statewide or multi-agency impacts. Therefore, the reader may use this document for a summary of state government fiscal position and issues, and use Volume 1 and 2 for greater detail as needed.

The report has nine components - described further below:

OVERVIEW:
  Legislative Budget Summary
  Other Budget Highlights
  2003 Biennium Outlook
  General Reference

VOLUME 1 AND 2:
Revenue Estimates
Revenue Estimates by Component
Trust Funds - Balances and Interest Earnings
HJR 2
Tax Policy and Initiatives
Appropriations by Agency and Program
HB 2

Legislative Budget Summary
This section provides a summary of the overall state fiscal position and of legislative budget action in the 1999 session. It includes a summary of general fund and total find revenues and expenditures in the 1999 biennium, as well as the anticipated state general fund balance at the end of both the 1999 and 2001 biennia. It also serves as a summary of major fiscal policy issues and budget actions that are discussed in more detail in subsequent sections. The section includes comparisons of the budgets established for the 2001 biennium to both the 1999 biennium and the published Executive Budget.

This section also summarizes, by function of state government, major policy decisions of the legislature in functional areas, such as human services and education. Its purpose is to provide the reader with a quick reference on major actions by the legislature and on any resulting changes in overall state government scope and/or emphasis. Each function, by individual agency, is discussed in greater detail in the "Appropriations by Agency and Program" narrative.

Other Budget Highlights
This section provides a brief discussion of each of several other budget issues addressed by the legislature that either have a statewide or multi-agency impact.

2003 Biennium Outlook
The sufficiency of ongoing revenue to fund ongoing expenditures of the general fund and other selected funds is discussed in this section.

General Reference
This section provides an overview of budget basics, including budget terms and concepts. It is designed to provide the reader with a basic grounding with which to read and understand the budget terms and concepts used or referred to in this report. This section also provides a comparison of agency budgets by fund type.

Revenue Estimates
The "Revenue Estimates" section provides a summary and overview of major general fund revenue sources to the state, as established by the legislature in House Joint Resolution 2. It also includes an overview of trust funds.

HJR 2
For reference, a copy of HJR 2 is provided. This resolution, approved by both houses, provides an official estimate of the state's anticipated revenue for each year of the 2001 biennium.

Tax Policy and Initiatives
This section provides a summarization and review of the major tax policy and revenue initiatives approved by the legislature.

Appropriations by Agency and Program
Within this narrative, section A through E include detailed discussions of the appropriations established by the legislature for each agency and program in state government that receives an appropriation in House Bill 2. each section contains a number of agencies organized by functional grouping. Also includes, for each agency, is a brief discussion of other bills having a fiscal impact on the agency. A more detailed explanation of the organization and content of this narrative is included in the introduction to the agency budgets on page 95 in Volume 1. This narrative also includes, in section F, a discussion of all budgets initiatives in the Long=Range Building Program. Sections A and B are in Volume 1, and sections C through F are in Volume 2.

House Bill 2
For reference, Volume 1 includes a copy of House Bill 2 (the general appropriations act).

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