HOUSE JOINT RESOLUTION NO. 1
INTRODUCED BY B. LAKE
BY REQUEST OF THE REVENUE AND TRANSPORTATION INTERIM COMMITTEE
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 EACH YEAR OF THE 2006-07 BIENNIUM FOR THE PURPOSE OF ACHIEVING A BALANCED BUDGET AS MANDATED BY ARTICLE VIII, SECTION 9, OF THE MONTANA CONSTITUTION; ACCEPTING A PRELIMINARY JUNE 30, 2005, UNRESERVED GENERAL FUND BALANCE THAT WAS ESTABLISHED BASED ON GENERALLY ACCEPTED ACCOUNTING PRINCIPLES; ESTABLISHING AN OFFICIAL ESTIMATE OF NONGENERAL FUND REVENUE RELATED TO COMMON SCHOOL INTEREST AND INCOME; AND REQUESTING THAT THE GOVERNOR'S OFFICE OF BUDGET AND PROGRAM PLANNING USE THE REVENUE ESTIMATES CONTAINED IN THIS RESOLUTION AS OFFICIAL REVENUE ESTIMATES FOR FISCAL YEARS 2006 AND 2007.
WHEREAS, the Montana Supreme Court decided, among other matters, in Columbia Falls Elementary Schools v. State of Montana, 2005 MT 69, 326 Mont. 304, 109 P.3d 257 (2005), that Montana's current school funding formula is unrelated to relevant educational needs; and
WHEREAS, the 59th Legislature, in response to the Supreme Court decision, defined a basic system of free quality public elementary and secondary schools and identified educationally relevant factors of the basic system in Senate Bill No. 152, enacted as Chapter 208, laws of 2005; and
WHEREAS, the 59th Legislature established a Quality Schools Interim Committee to develop, among other things, a funding formula that equitably distributes the state's share of the costs of the basic system;
WHEREAS, the 59th Legislature passed House Joint Resolution No. 42 to study the magnitude of unfunded liabilities in the state's retirement systems;
WHEREAS, on December 5, the Governor issued a call for a special session of the 59th Legislature to begin December 14, 2005; and
WHEREAS, the Governor's call directed the Legislature to consider legislation, including appropriations, to implement a funding system for Montana's public elementary and secondary schools that complies with Article X, section 1, of the Montana Constitution, that fulfills the requirements of the Montana Supreme Court decision in Columbia Falls Elementary Schools v. State of Montana, and that satisfies the definition of quality schools and other provisions contained in Senate Bill No. 152; and
WHEREAS, the Governor's call also directed the Legislature to consider legislation to appropriate one-time money from the state general fund to public elementary and secondary schools for recognition of the cultural heritage of American Indians and for school-related purposes, specifically including facility studies, weatherizing buildings for long-term energy savings, deferred maintenance, and assistance with utility and transportation energy costs; and
WHEREAS, the Governor's call also directed the Legislature to consider legislation to appropriate money from the state general fund to the Teachers' Retirement System to reduce the unfunded liability of the system and to help improve Montana's ability to recruit and retain qualified teachers; and
WHEREAS, the Governor's call also directed the Legislature to consider legislation to appropriate money from the state general fund to the Public Employees' Retirement System to help reduce the unfunded liability of the system; and
WHEREAS, the Governor proposes $189.67 million in appropriations by the Legislature; and
WHEREAS, actual revenue collections in fiscal year 2005 were $133.35 million higher than estimated by the 59th Legislature meeting in regular session; and
WHEREAS, general fund revenue collections in fiscal year 2006 and in fiscal year 2007 are expected to exceed the amount estimated by the 59th Legislature meeting in regular session;
WHEREAS, changes in oil and natural gas production and prices affects interest and income from common school lands;
WHEREAS, the amount of estimated revenue may affect policy decisions of the Executive Branch and the Legislative Branch; and
WHEREAS, given the Governor's proposed appropriations and given the Legislature's constitutional responsibility to balance the budget under Article VIII, section 9, of the Montana Constitution, it is in the best interest of the state that revised revenue estimates for the 2006-07 biennium be considered by the Legislature meeting in special session; and
WHEREAS, the revenue estimates, including common school interest and income, contained in this resolution and the underlying assumptions used to derive the estimates provide the basis for a comprehensive analysis of the state's financial condition; and
WHEREAS, the revenue estimates contained in this resolution were approved by the Revenue and Transportation Committee on December 13, 2005; and
WHEREAS, the revenue estimates contained in this resolution are intended to supersede the estimates contained in House Joint Resolution No. 2 of the 59th 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 state general fund revenue for fiscal years 2006 and 2007 be estimated to be $1,542,615,000 and $1,597,055,000, respectively.
BE IT FURTHER RESOLVED, that the Legislature accept for budget purposes the preliminary unreserved fiscal year 2005 fund balance of $297,440,000 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 the revenue estimates and the underlying assumptions contained in this resolution as the official revenue estimates for fiscal years 2006 and 2007.
GENERAL FUND REVENUE
The revised estimates for total general fund revenue for fiscal years 2006 and 2007 are based on the assumption of a continuation of Montana law as it existed on December 1, 2005. The revenue estimates contained in the following tables are also based on the relevant assumptions contained in House Joint Resolution No. 2 considered during the 2005 Legislative Session, statutory changes affecting general fund revenue that were enacted during the 2005 Legislative Session, and revisions to certain assumptions, such as those related to capital gains, dividends, mineral royalties, U.S. corporate profits, tax audit collections, the value of taxable property, and oil and natural gas production and prices.
Current Law
General Fund Revenue Estimates
(In Millions of Dollars)
Actual Estimated Estimated Estimated
Source of Revenue FY 2005 FY 2006 FY 2007 FY 2006/FY 2007
Individual Income Tax $706.235 $677.815 $712.611 $1,390.426
Statewide and Vo-Tech Property Taxes 167.270 176.391 182.900 359.291
Oil and Natural Gas Production Tax 62.626 99.410 92.554 191.964
Corporation Income Tax 98.214 91.427 97.281 188.708
Vehicle License Fee 80.132 80.140 82.050 162.190
Insurance Tax and License Fees 57.308 61.580 64.637 126.217
Video Gambling Tax 53.361 55.031 57.509 112.540
All Other Revenue 34.723 27.389 29.601 56.990
Permanent Coal Trust Interest Earnings 36.752 32.211 32.290 64.501
Vehicle Registration Fee 30.639 35.029 36.960 71.989
U.S. Mineral Royalty 27.294 26.712 27.962 54.674
Telecommunications Excise Tax 21.144 21.700 22.101 43.801
Tobacco Settlement 2.978 2.319 2.309 4.628
Public Institution Reimbursements 12.509 15.127 15.049 30.176
3% Accommodations Sales Tax 10.201 10.715 11.419 22.134
Estate Tax 4.191 1.950 0.939 2.889
Treasury Cash Account Interest 10.046 13.102 14.367 27.469
Liquor Excise and License Tax 11.468 11.535 11.959 23.494
Coal Severance Tax 10.312 8.466 8.644 17.110
Cigarette Tax 35.117 33.069 31.790 64.859
Lottery Profits 6.223 7.844 7.839 15.683
Nursing Facilities Fee 5.913 5.851 5.824 11.675
Liquor Profits 6.650 6.786 7.017 13.803
Investment License Fee 5.192 4.598 4.736 9.334
Electrical Energy Producer's License Tax 4.074 4.276 4.270 8.546
Highway Patrol Fines 4.293 5.042 5.324 10.366
Metalliferous Mines Tax 5.264 5.236 5.438 10.674
Public Contractors Tax 1.411 3.030 2.522 5.552
Wholesale Energy Transaction Tax 3.370 3.520 3.555 7.075
Beer Tax 2.937 2.986 3.039 6.025
Driver's License Fee 3.373 2.784 2.792 5.576
Rental Car Sales Tax 2.566 2.704 2.820 5.524
Tobacco Tax 4.024 3.779 3.847 7.626
Railroad Car Tax 1.604 1.574 1.562 3.136
Wine Tax 1.503 1.487 1.538 3.025
Telephone Tax 0.032 0.000 0.000 0.000
Total General Fund $1,530.949 $1,542.615 $1,597.055 $3,139.670
Current Law
Nongeneral Fund Revenue Estimates for Common School Interest and Income
(In Millions of Dollars) Actual Estimated Estimated Estimated
Source of Revenue FY 2005 FY 2006 FY 2007 FY 2006/FY 2007
Common School Interest and Income $68.036 $67.013 $64.225 $131.238
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