HOUSE JOINT RESOLUTION NO. 1
INTRODUCED BY R. DEVLIN
A JOINT RESOLUTION OF THE SENATE AND THE HOUSE OF REPRESENTATIVES OF THE STATE OF MONTANA ESTABLISHING AN OFFICIAL ESTIMATE OF THE STATE'S ANTICIPATED GENERAL FUND REVENUE FOR THE 2002-03 BIENNIUM FOR THE PURPOSE OF ACHIEVING A BALANCED BUDGET; ACCEPTING THE JUNE 30, 2002, GENERAL FUND BALANCE THAT WAS ESTABLISHED BASED ON GENERALLY ACCEPTED ACCOUNTING PRINCIPLES; AND REQUESTING THE GOVERNOR'S OFFICE OF BUDGET AND PROGRAM PLANNING TO USE THE FIGURES CONTAINED IN THE RESOLUTION AS THE OFFICIAL REVENUE TOTALS FOR FISCAL YEAR 2002 AND THE OFFICIAL REVENUE ESTIMATES FOR FISCAL YEAR 2003.
A JOINT RESOLUTION OF THE SENATE AND THE HOUSE OF REPRESENTATIVES OF THE STATE OF MONTANA ESTABLISHING AN OFFICIAL ESTIMATE OF THE STATE'S ANTICIPATED GENERAL FUND REVENUE FOR THE 2002-03 BIENNIUM FOR THE PURPOSE OF ACHIEVING A BALANCED BUDGET; ACCEPTING THE JUNE 30, 2002, GENERAL FUND BALANCE THAT WAS ESTABLISHED BASED ON GENERALLY ACCEPTED ACCOUNTING PRINCIPLES; AND REQUESTING THE GOVERNOR'S OFFICE OF BUDGET AND PROGRAM PLANNING TO USE THE FIGURES CONTAINED IN THE RESOLUTION AS THE OFFICIAL REVENUE TOTALS FOR FISCAL YEAR 2002 AND THE OFFICIAL REVENUE ESTIMATES FOR FISCAL YEAR 2003.
WHEREAS, Article VI, section 9, of the Montana Constitution requires the Governor to submit to the Legislature a budget for the ensuing fiscal period, containing in detail the estimated revenue of the state; and
WHEREAS, Article VIII, section 9, of the Montana Constitution prohibits the Legislature from appropriating funds in excess of the anticipated revenue of the state; and
WHEREAS, between the April 2001 adjournment of the 57th Legislature and October 2001, general fund revenue was exceeding expectations; and
WHEREAS, the 57th Legislature had estimated a projected general fund ending fund balance of $53.8 million by June 30, 2003; and
WHEREAS, at the end of fiscal year 2001, the general fund balance had increased $62.2 million, leaving a projected ending fund balance on June 30, 2003, of $116.5 million; and
WHEREAS, in December 2001, the Legislative Fiscal Division reported to the Revenue and Transportation Interim Committee that revenue collections from individual income taxes had begun to slow; and
WHEREAS, by May 2001, individual and corporate income tax revenue was well below projections while income tax refunds to taxpayers had increased; and
WHEREAS, the Legislative Fiscal Division has attributed the decline in revenue partly to the national economic recession, the September 11 terrorist attacks, and a marked decline in capital gains, which has resulted in corresponding reductions in individual and corporate income tax revenue; and
WHEREAS, section 17-7-140, MCA, requires the Governor to implement limited spending reductions in the event of a projected general fund budget deficit; and
WHEREAS, pursuant to section 17-7-140, MCA, the Governor's Budget Director recommended a 3.5% reduction in general fund expenditures and notified the Legislative Fiscal Analyst, the Legislative Finance Committee, and the Revenue and Transportation Interim Committee of this recommendation; and
WHEREAS, on June 13 and 14, the Legislative Finance Committee and the Revenue and Transportation Interim Committee met separately to examine the proposed spending reductions, to review revised revenue estimates, and to make recommendations to the Governor; and
WHEREAS, revenue to the general fund has continued to decline and it was determined at the end of June that the 3.5% reduction in expenditures would be insufficient to avoid deficit spending;
WHEREAS, the Legislative Fiscal Division expects total general fund revenue for the 2003 biennium to be $114.6 million below the estimates adopted by the 57th Legislature in House Joint Resolution No. 2; and
WHEREAS, on June 28, the Governor issued a call for a special session of the 57th Legislature to begin August 5, 2002; and
WHEREAS, the Governor's call directed the Legislature to consider legislation that would approve fund balance transfers, reduce general fund expenditures, reduce nongeneral fund appropriations and nonbudgeted transfers, reduce the general fund shortfall, and provide for a guarantee account in the state special revenue fund; and
WHEREAS, given the magnitude of Montana's fiscal crisis and given the Legislature's constitutional responsibility to balance the budget, it is in the best interests of the state that revenue forecasts be discussed and determined in a public hearing at which all interested individuals may attend and participate; and
WHEREAS, actual revenue for fiscal year 2002 and revised revenue projections for fiscal year 2003 will be reviewed by the House and Senate Taxation Committees in a joint meeting prior to the commencement of the special session; and
WHEREAS, the revenue estimates contained in this resolution are intended to supersede the estimates contained in House Joint Resolution No. 2 of the 57th Legislature meeting in regular session.
NOW, THEREFORE, BE IT RESOLVED BY THE SENATE AND THE HOUSE OF REPRESENTATIVES OF THE STATE OF MONTANA:
That the actual state general fund revenue for fiscal year 2002 be $1,265,711,000 and that the estimated general fund revenue for fiscal year 2003 be $1,259,027,000.
BE IT FURTHER RESOLVED, that the Legislature accept for budget purposes, the unreserved fiscal year 2002 fund balance of $84,105,211 for the general fund, prepared according to generally accepted accounting principles.
BE IT FURTHER RESOLVED, that the Governor's Office of Budget and Program Planning use, as contemplated in 5-18-107(2), the figures contained in this resolution as the official revenue totals for fiscal year 2002 and the official revenue estimates for fiscal year 2003.
GENERAL FUND REVENUE
The revised estimates for total general fund revenue for the 2002-03 biennium are based on an assumption of a continuation of Montana law as it existed on July 1, 2002. The general fund revenue estimates contained in the following table are also based on statutory changes affecting general fund revenue that were enacted during the 2001 Legislative Session.
Current Law
General Fund Revenue Estimates
(In Millions of Dollars)
Actual Estimated Actual and Estimated
Source of Revenue FY 2002 FY 2003 FY 2002 and FY 2003
Individual Income Tax $517.568 $527.919 $1,045.487
Statewide School and Vo-Tech Property Taxes 169.339 174.297 343.636
Corporation Income Tax 68.173 63.095 131.268
Vehicle Fees in Lieu of Tax 73.127 74.224 147.351
Common School Interest & Income 48.938 48.801 97.739
Insurance Tax & License Fees 47.291 47.793 95.084
Permanent Coal Trust Interest Earnings 37.605 37.640 75.245
U.S. Mineral Royalty 19.772 20.474 40.246
All Other Revenue 42.439 20.358 62.797
Tobacco Settlement Revenue 18.647 18.854 37.501
Telecommunications Excise Tax 19.594 21.379 40.973
Video Gambling Machine Tax 43.666 45.413 89.079
Treasury Cash Account Interest 13.191 14.316 27.507
Inheritance Tax and Estate Tax 13.816 9.299 23.115
Oil & Natural Gas Production Tax 12.902 13.819 26.721
Motor Vehicle Registration Fees 27.271 27.680 54.951
Public Institution Reimbursements 14.283 16.332 30.615
Coal Severance Tax 8.469 8.460 16.929
Liquor Excise & License Tax 9.514 9.990 19.504
Cigarette Tax 7.887 7.722 15.609
Investment License Fee 4.992 5.067 10.059
Lottery Profits 7.467 6.800 14.267
Liquor Profits 5.600 5.713 11.313
Nursing Facilities Fee 5.918 5.968 11.886
Foreign Capital Depository Tax 0.000 0.000 0.000
Electrical Energy Producer's License Tax 4.197 4.217 8.414
Metalliferous Mines Tax 3.329 3.176 6.505
Highway Patrol Fines 4.062 4.130 8.192
Public Contractors Tax 3.267 2.275 5.542
Wholesale Energy Transaction Tax 2.906 3.143 6.049
Tobacco Tax 2.183 2.319 4.502
Driver's License Fee 2.580 2.592 5.172
Railroad Car Tax 1.490 1.537 3.027
Wine Tax 1.232 1.265 2.497
Beer Tax 2.784 2.960 5.744
Telephone License Tax 0.212 0.000 0.212
Long-Range Bond Excess 0.000 0.000 0.000
Total General Fund $1,265.711 $1,259.027 $2,524.738
- END -
I hereby certify that the within joint resolution,
HJ 0001, originated in the House.
Chief Clerk of the House
Speaker of the House
Signed this day
of , 2002.
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