Revenue and Transportation Interim Committee

RTIC Acknowledges Possible Ending Fund Balance Below Statutory Limits

Committee: Revenue and Transportation Interim Committee
Author: Megan Moore
Posted on September 22, 2017

Illustration of three bags of money

The September meeting of the Revenue and Transportation Interim Committee included discussion of a projected general fund budget deficit in addition to the usual agency monitoring and interim study agenda items.

Section 17-7-140(3)(a) defines projected general fund budget deficit as an amount, certified by the budget director to the governor, by which projected ending general fund balance for the biennium is less than a certain percentage of general fund appropriations. At this point in the biennium, if the projected ending general fund balance is less than 5% of general fund appropriations for the second fiscal year of the biennium, a projected general fund budget deficit may be certified. Upon a determination that an amount of actual or projected receipts will result in an amount less than the amount projected to be received in the revenue estimate, the budget director is required to notify RTIC of this amount. The committee must then provide the budget director with any recommendations about the amount within 20 days of the budget director’s notification.

The budget director notified the committee on September 5, 2017, of the intent to certify a projected general fund budget deficit.  The agenda item devoted to this discussion included Legislative Fiscal Division presentations of the Fiscal Year End 2017 Budget Status Report and of various expenditure and revenue scenarios to aid the committee in considering its recommendation. Budget Director Dan Villa also presented a general fund revenue outlook outlining the reasons for certifying a projected general fund budget deficit.

The committee sent a letter to the budget director on September 15, 2017, acknowledging that revenue projections as compared to the appropriations during the 2017 legislative session may result in an ending fund balance below statutory limits provided for in section 17-7-140, MCA. The letter also recommends that the Governor and the Legislative Fiscal Division continue to monitor collections and projections and that the Governor continue to inform the Legislature of efforts to comply with section 17-7-140, MCA.

Agenda items for the committee’s three assigned studies of agricultural property valuation, tax increment financing, and the taxation of centrally assessed and industrial property focused on gathering background information and the study of centrally assessed and industrial property included a panel of taxpayer representatives and Department of Revenue Director Mike Kadas.

The agency update for the Montana Tax Appeal Board included an update of active cases and discussion of how budget cuts could affect training of county tax appeal board members. The Department of Revenue update covered major litigation, personal income tax fraud, informal property appraisal appeals, 2017 market value appreciation, statewide mill levies for fiscal year 2018, and discussion of how budget cuts could affect the agency. The Department of Transportation overview included information on federal transportation funding and the early impacts of House Bill No. 473, which increased fuel and special fuel taxes.

Other topics covered at the September meeting included an update on the implementation of Senate Bill No. 333, which revised medical marijuana laws and provided for a tax on medical marijuana providers, and a panel discussion on the impact of placing property into federal trust status. The committee also did a final review of the work plan and changed its February meeting to March 13-14, 2018, and its July meeting to July 10-11, 2018.

The committee will hold its next meeting December 4-5, 2017, at the Capitol building in Helena. For more information visit the committee’s website or contact Megan Moore, committee staff.

Committee Website:
Committee Staff: or 406-444-4496