Legislative Finance Committee

LFC Met in October to Discuss Budget Reductions and Fiscal Updates

Committee: Legislative Finance Committee
Author: Susie Lindsay
Posted on October 30, 2017

Iluustration of mountain and trees

The Legislative Finance Committee met on October 4-5, 2017 in Helena.  The committee had a full agenda both days, with the first day used to understand the proposed executive’s expenditure reductions and hear testimony on the reductions.  The committee received an analysis of the proposals from Legislative Fiscal Division (LFD) staff and heard an update from the Governor’s Budget Director.  The committee then spent the remainder of the day listening to concerned members of the public explain how the proposed reductions would impact their lives.  After listening to the testimony, the committee drafted a letter to the Governor asking him to evaluate which reductions impose the least possible impact on services, property taxes, safety and security of Montana’s citizens.

Following a full day of public testimony, the committee turned its attention to other state financial matters on October 5.  The Legislative Fiscal Division staff presented reports that updated the committee on the following:

  1. Fiscal year-end 2017 - General fund ending balance at the end of FY 2017 was $47.6 million.  LFD revenue staff explained that individual income tax revenue collections were $70.3 million less than anticipated.  Staff explained that while the withholding portion of income tax was strong, pass-through and capital gain income was not; 
  2. 2019 Biennium Budget Status Report – LFD Operations Manager, Quinn Holzer discussed budget modifications that occurred in the 2019 biennium.  He also explained SB 261 appropriation reductions, the result of lower than expected revenues in FY 2017;
  3. Stephanie Morrison, LFD lead revenue analyst compared SB 261 Budget Stabilization Reserve Fund to other states’ approaches to rainy day funds.  She indicated that the committee will receive additional information in future meetings;
  4. Joe Triem, LFD Fiscal Manager presented the results of an information technology services survey completed by state agencies;
  5. The State Information Technology Services provided required information technology reports to the committee; 
  6. Kris Wilkinson, LFD lead expenditure analyst explained other required reports including the memorandum from the Governor’s Budget Director for the committee’s review and comment on a proposed fiscal year transfer of up to $23.5 million in general fund appropriation authority from FY 2019 to FY 2018 for fire suppression costs.  The committee responded in a letter to the Governor’s Budget Director; and
  7. The Legislative Fiscal Analyst, Amy Carlson, presented an overview of state finances.  She provided scenarios showing different levels of expenditure reductions necessary when certain assumptions are used.  She discussed bond rating agencies and their decisions in determining bond ratings for the state.  She included charts on Montana’s cash projections and options the state has when cash is low.

The next meeting of the Legislative Finance Committee is scheduled for December 11-12, 2017 in room 102 State Capitol Building.