While the federal government and 42 states wrestled with tough economic decisions based on projected shortfalls, Montana officials were congratulating themselves for achieving a surplus this year.
As of the close of its fiscal year on July 1, Montana reported an ending fund balance of $340 million.
General fund revenue collections in June were the highest in the state’s history and the year-over-year growth rate for fiscal year 2011 was 9.55%.
Only eight states, including Montana, were able to pass a budget this year that doesn’t include projected shortfalls, according to the Center on Budget and Policy Priorities.
“For 15 years Montana averaged just $68 million in reserves,” said Gov. Brian Schweitzer, a Democrat who has served in the office for seven years. “Today, we have five times that cushion, a solid safety net that is attractive to any business looking to invest.”
State budget director David Ewer attributed Montana’s ability to achieve a surplus to good financial practices during the boom years.
“We got it right when the times were good,” Ewer said. “We didn’t over-commit when revenues were going through the roof.”
Unlike many states, Montana has not had to furlough or lay off state employees or make steep cuts to education, Ewer said.
The state, however, also had natural advantages in the downturn.
It doesn’t have a strong dependence on the financial services businesses that were pummeled during the economic crash. Its main industries are energy-based, Ewer said.
The Legislature nixed Schweitzer’s proposal to include $100 million in bond issuance in this year’s budget, which would have funded new facilities for higher education and a new facility for the historical society, according to the budget chief.
Ewer said he did not know if the governor would revisit the issue in next year’s budget.
“We have very little bonded indebtedness on the horizon,” he said. “We are very judicious with bonds. We have $160 million in outstanding general obligation bonds. That is a pittance compared to most states.”
