Balanced, Responsible Budget Passes, Heads to the Governor’s Desk
HELENA, Mont. – The fiscally responsible Republican budget today cleared the Montana legislature and is headed to Governor Greg Gianforte’s desk for his signature.
First introduced by Gov. Gianforte on January 7, the Republican budget reduces House Bill 2 general fund spending by $145 million compared to the previous administration proposed budget.
“For too long, Montanans have sent their hard-earned money to Helena only to see their taxes increase and spending keep pace. That changes today,” Governor Gianforte said. “I thank Budget Director Kurt Alme, his staff, and the legislature for their dedicated efforts to deliver this responsible, balanced budget. I look forward to signing into law our fiscally conservative budget that holds the line on spending, keeps our reserves strong, preserves essential services, and helps us lead Montana’s comeback.”
The Republican budget grows general fund spending by 0.75 percent per year, well below the projected 2.5 percent of annual inflation and population growth and the 2.3 percent average growth over the last biennium.
The Republican budget increases the ending fund balance proposed by the previous administration from $250 million to over $350 million, and it keeps the state’s “rainy day” fund full to address future contingencies.
The Republican budget is also structurally balanced, with anticipated ongoing revenues exceeding ongoing expenses by over $40 million per year.
“With this fiscally strong and conservative budget, Montana is poised to emerge from the pandemic with strong economic growth and return money back to taxpayers,” said Kurt Alme, director of the Office of Budget and Program Planning.
Montanans will keep more of what they earn with the governor and legislature’s joint budget, with over $60 million of tax reductions each year when fully phased in.
The Republican budget includes measures to make Montana more competitive, including reducing the top income tax rate to 6.75% beginning next year and to 6.5% in 2024, while compressing our rates to two and simplifying our complex tax code. It also triples the business equipment tax rate exemption to $300,000 to encourage business investment.
The budget also provides over $10 million in annual broad-based property tax relief and increases the property tax credit for low-income seniors who are homeowners and renters.
The budget preserves essential services, and simultaneously invests in other key priorities as the governor leads the Montana comeback. The budget provides $2.5 million in incentives to increase starting teacher pay and $1 million per year in tax credits for trades education and training. It also makes a significant investment in the state’s critical infrastructure needs.
To combat the state’s drug epidemic, the budget also funds the Healing and Ending Addiction through Recovery and Treatment (HEART) Fund, introduced by Governor Gianforte in January. The HEART Fund makes a historic investment in community substance abuse prevention and treatment programs, providing $25 million per year of mostly federal Medicaid funds to fund a full continuum of care.