Budget analysis 1999 biennium : overview

154 Pages·1997·6.1 MB·English

by  Montana. Legislative Fiscal Division

BUDGET
ANALYSIS
BIENNIUM
1999
&
Overview
General Reference
January 1997 STATT OnniMPNTS COLLECTION
MAR 1 4 ZOO?
MONTANA STAIE LiSRARY
1515 E. 6th AVE.
HELENA. MONTANA 59620
LEGISLATIVE
FISCAL
DIVISION
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BUDGET
ANALYSIS
1999 Biennium
Overview
Presented to the Fifty-fifth Legislature
Submitted by
The Legislative Fiscal Division
Helena, Montana
January 1997
Vrf V
Digitized by the Internet Archive
in 2010 with funding from
IVIontana State Library
http://www.archive.org/details/budgetanalys191999mont
1
Legislative Fiscal Analyst rl^^^^^^Sn Room 105 • StateCapitol
CLAYTON SCHENCK ^^I^^p^S^^^^?^^^^J ^'^ Box 2017 1
Helena, Montana59620-1711
^'^^^^P^ [phone]
FAX [phone]
MONTANA LEGISLATIVE BRANCH
Legislative Fiscal Division
December 1996
Members ofthe Fifty-Fifth Legislature
Members ofthe Legislative Finance Committee
In accordance with Section 5-12-302, MCA, I submit for your consideration a fiscal analysis ofthe
state budget outlook for the 1999 biennium and Governor Racicot's Executive Budget. This multi-
volume report includes the "Overview and General Reference" volume that presents a broad fiscal
overview and discusses significant fiscal issues as well as fiscal reference material. Revenue forecasts
and analysis have been included for the first time in a separate volume entitled "Economic
Assumptions and Revenue Estimates." Also a first, "Agency Budgets - Volumes I and 11" are a
combined presentation of this office and the Governor's Office of Budget and Program Planning.
Those volumes provide the Governor's agency budget recommendations along with the Legislative
Fiscal Division's detailed analysis ofthe components ofthe Executive Budget. The combined agency
budget volumes are designed to be a working document during the appropriations process.
The staffofthe Legislative Fiscal Division look forward to being ofservice to the legislature during
We
the 1997 session. are here to assist all legislators in obtaining the best possible fiscal information
to facilitate setting fiscal policy and appropriations. We welcome any comments you may have
regarding the format, content, and usefulness of this report, as they will be helpful in our future
efforts to provide fiscal information for legislators.
We thank the Office ofBudget and Program Planning and agency stafffortheir excellent cooperation
during the budget analysis process and development ofthe joint agency volumes.
I cannot adequately express my gratitude to the LFD stafffor the thousands ofextra hours and their
personal sacrifice in preparing this analysis. The dedication and hard work ofthe staffare a credit
to the legislature and the people ofMontana.
Respectfully submitted,
0-^
Oayton Schenck
Legislative Fiscal Analyst

TABLE OF CONTENTS
OVERVIEW
StaffAssignments vi
Introduction
Combined Executive/Legislative Presentation 1
How to Use this Report 2
State Fiscal Outlook 5
General Fund Summary
Introduction 7
1997 Biennium General Fund Outlook 7
General Fund Revenue Estimates 9
1999 Biennium General Fund Outlook 12
Differences from Executive Proposal 14
Fund Balance 15
Executive Budget Analysis - Summary
Executive Budget Priorities 17
Biennial Budget Comparisons 19
Executive Budget Proposal
Present Law Adjustments/New Proposals 24
Executive Revenue/Tax Policy Initiatives 26
Expenditure Proposals 33
Executive Budget Concerns 46
Global Executive Budget Proposals
Introduction 48
Supplementals 49
Public School Funding 51
Executive Pay Plan 60
Structural Balance 64
Inflation/Deflation 66
Long-Range Planning Proposals 67
Highways Finance - Declining Fund Balance 68
State Compensation Insurance Fund 69
Resource Indemnity Trust 70
Other Fiscal Issues
Introduction 73
Performance Based Budgets 74
Budget Comparisons Methodology 76
Combined Coal Severance Tax Account 78
SB 378 Interim Study 79
Year 2000 Fiscal Impact 84
Fund Balance Adequacy 85
Federal Welfare Reform 87
Public Health and Human Services 88
Reorganizations 89
Unified Prevention Budget 91
III
TABLE OF CONTENTS
Reference
Budget Basics 99
Histor>' ofPublic School Funding 107
Expenditure Limitation 116
Agency Budget Comparisons by Fund 117
ECONOMIC ASSUMPTIONS AND REVENUE ESTIMATES
Introduction
Economic Overview
Major Economic Assumptions
Revenue Estimates
Trust Funds - Balances and Interest Earnings
House Joint Resolution 2
AGENCY BUDGETS- VOLUME
1
Agency Budget Analysis
General Government and Transportation Section A
Human Services Section B
Natural Resources and Commerce Section C
AGENCY BUDGETS VOLUME
- 2
Institutions and Public Safety Section D
Education Section E
Long-Range Planning Section F
Proprietary Rate Setting and State Fund Section G
IV
LEGISLATIVE FINANCE COMMITTEE
Representative Ed Grady Senator Eve Franklin
Representative John Johnson Senator Loren Jenkins, Vice-Chair
Representative Royal Johnson Senator Fred Van Valkenburg
Representative Matt McCann, Chair Vacant
Representative Bob Raney Vacant
Representative Tom Zook Vacant
LEGISLATIVE FISCAL DIVISION
Clayton Schenck, Legislative Fiscal Analyst
Terry Johnson, Principal Fiscal Analyst
Taryn Purdy, Principal Fiscal Analyst
Skip Culver, Senior Fiscal Analyst
Pam Joehler, Senior Fiscal Analyst
Nan LeFebvre, Senior Fiscal Analyst
Roger Lloyd, Senior Fiscal Analyst
Mary Longmaid, Senior Fiscal Analyst
Jim Standaert, Senior Fiscal Analyst
Sandy Whitney, Senior Fiscal Analyst
Joanne Chance, Associate Fiscal Analyst
Bob Tallerico, Associate Fiscal Analyst
Jim Turner, Associate Fiscal Analyst
Cindy Weaver, Associate Fiscal Analyst
Lisa Mader, Office Manager
Shauna Ryan, Secretary