Surplus is "Smoke and Mirrors"

Janna Taylor, guest column

The one billion dollar surplus is pretty much just smoke and mirrors. Last Thursday and Friday I was in Helena at my Interim Finance Committee meeting. We started out with a detailed report on revenue.

You might have read that the state has a one billion dollar surplus. Much of that estimate is based on global information from last July and August. The market declines since then are not figured in yet.

The legislative fiscal experts are discounting at least $275 million right off the top. As I’ve explained many times, Montana is primarily supported with individual income tax. Many of us are earning less this year.

Several area businesses have lain off workers. Corporate taxes are down and our natural resources taxes appear to be leveling off. Many oil rigs are moving to North Dakota.

The bottom line? The true surplus is about $470 million. As always, I will work for permanent property or income tax reductions. Everyone in Helena believes we need to be cautious and no one wants to start any new programs.

We heard the latest fire suppression report. This year the state share was $8.5 million and the feds paid $2.5. Last year was the record high year, coming in at $81 million, of which $50 or $52 million is our share.

To get the average fire suppression costs, the analyst throws out the highest and lowest costing years of the last seven. This average has gone down a couple of million dollars to $17.7 million.

The Interim Fire Suppression Committee held meetings around the state. They have proposed over forty bills for the next session.

Which reminds me. There are already 550 bill drafts in the hopper. I am working on several with the help of hold over Senators. Representatives cannot submit bills until they are re-elected.

First, the Flathead Lakers want help in protecting our lake from the zebra mussel and other invasive species. Bigfork needs bonding, loans, and/or grants for a storm water system.

I’d like to see random or twice daily alcohol or drug tests as part of a sentence for first time offenders. This has worked well as part of a drug court and could save us money. It may require a misdemeanor probation officer or another deputy.

Just like four years ago, I am very concerned about the state retirement systems. The amortization data available is from June 30, 2008. New data will not be released for several more weeks. Still, the Teachers’ Retirement System is already past the 30-year amortization level.

There is a lot more money paid out of our retirement accounts than is paid in. The difference is made up by the returns from our bond portfolio. Let’s hope our Board of Investments knows what they’re doing.

My sub-committee spent several hours on reports from agencies. We are incorporating performance measurements into agencies’ requests for funding. I have also been working on budgeting guidelines, establishing procedures, and base amounts.

The next Interim Finance Committee meets the middle of November. Hopefully we’ll have the governor’s proposed budget by then. As always, I work for you. Please call me at 849-6096, e-mail me at jannataylor@montana.com or write me at Box 233, Dayton, MT 59914.