Governor Bullock Releases Budget that Protects Essential Services While Investing in Education and Economic Recovery

Bullock’s final budget is balanced and protects services Montanans rely on without making cuts or raising taxes

• November 16 2020

Governor Steve Bullock today released his final budget proposal for the 2023 biennium. Because Montana entered the COVID-19 pandemic in a historically strong fiscal position with maximum reserves, the governor’s proposal balances the budget without raising taxes or making cuts to essential services that would be detrimental to public health, education, and efforts to recover from economic impacts caused by the virus.

“The circumstances of the past year have presented challenges unparalleled in our lifetime, however, our state budget has weathered this storm with exceptional strength,” Governor Bullock said. “While other states have already had to raise revenues and reduce or eliminate services, we’re leaving the incoming administration and the 2021 legislature a balanced budget and a full set of tools, including a Budget Stabilization Fund and a wildfire suppression fund with capacity to cover four average fire seasons.”

“This is a budget that does not necessitate any cuts to the government programs and services relied upon by Montanans. If the next administration and legislature choose to cut government services, it’ll be based upon ideology, not necessity,” continued Governor Bullock.

Governor Bullock’s budget makes clear that Montana can have a balanced budget with healthy reserves while making critical investments in education and other areas and building on statutory changes in infrastructure framework made last session to create good-paying jobs and continue supporting Montana’s economic recovery.

Governor Bullock’s proposal utilizes the Budget Stabilization Reserve for its exact intent – to mitigate the need for budget reductions in abnormally challenging times. The proposal includes a $75 million transfer from the Budget Stabilization Reserve to the General Fund and would leave a General Fund ending fund balance in Fiscal Year 2023 of $251 million. Additionally, after taking into account this year’s fire suppression costs, the wildfire suppression fund will have approximately $85 million or enough to cover the cost of four average fire seasons. The Budget Stabilization Reserve, or rainy-day fund, will have nearly $40 million remaining after the proposed transfers.

Other states have already had to raise taxes and reduce or eliminate services due to the COVID-19 pandemic. Under Governor Bullock, Montana has been a careful steward of taxpayer dollars and state agencies exercised additional scrutiny when hiring and making other expenditures. At the end of the 2020 fiscal year, the state had excess reversions to fill the fire suppression fund to the statutory maximum for the first time in its history, while also maintaining the Budget Stabilization Reserve at its statutory maximum of $114.2 million.

“Absent further intervention and engagement at the federal and state level, there have been and will continue to be significant economic and public health challenges as a result of the pandemic.  However, Montana entered this challenging year in an incredibly strong fiscal position. I’m pleased now to leave it in a similarly strong position, particularly in the face of this global pandemic,” continued Governor Bullock.

Governor Bullock’s budget also proposes new investments, including:

• A $10 million investment in early childhood education
• An inflationary adjustment in base aid for K-12 that would add $72 million over the biennium
• A $4.6 million investment in need-based aid for residents seeking two or four-year degrees at Montana universities or colleges, an $18 million increase over the biennium for the university system, and $5 million toward the Montana Research and Economic Development Initiative
• A $499 million statewide infrastructure package including a proposal to bond $91.5 million in projects

Additionally, the budget includes modest increases for mental health services at the Department of Corrections, suicide prevention funding, and restoration of Indian Country economic development and language preservation programs. The budget also fully funds Medicaid expansion to ensure that hardworking Montanans can access healthcare coverage, which is more important than ever.

Governor Bullock’s budget proposal is available at this link: www.budget.mt.gov/Budgets/2023_Biennium.