$359 million budget gap could impact infrastructure bill

A $359 million gap divides budget estimates by Democratic Gov. Steve Bullock’s Office of Budget and Program Planning and the nonpartisan Legislative Fiscal Division.

The governor’s office projects the state will bring in about $6.891 billion in general fund revenues over the three years, or 5.5 percent more than the $6.533 billion forecast by the Legislative Fiscal Division.

According to Bullock’s budget director Dan Villa, the difference is enough to pay for “the entire Department of Corrections budget for a year and a half.”

The legislature can’t make the key spending decisions until it knows how much revenue is coming in. The chairmen of the House and Senate taxation committees have appointed a eight-member bipartisan panel to find a way to narrow the difference over the next few weeks.

GOP-led legislatures in the most recent legislative sessions adopted lower revenue estimates over the objections of Democratic governors, who preferred the higher numbers from their budget office.

The outcome of the debate will determine how much in money will be available for lawmakers to spend this session, not counting a projected budget surplus to cover unexpected costs.

Bullock and lawmakers from both parties agree they want to spend more on infrastructure. The estimate will help them decide how much is available to spend and how much money could be borrowed as bonds.

Legislators also must decide whether to approve new programs, such as Bullock’s pre-kindergarten program, estimated to cost $37 million.

House Minority Leader Chuck Hunter, D-Helena, now in his fourth term in the House, said he believes the $359 million gap is the largest he’s seen between the two offices.

Senate Taxation Chair Bruce Tutvedt, R-Kalispell, gave his view on what might happen if the legislature adopts the lower estimate.

“I think we’re going to have a very tight budget with very little infrastructure and a very lean budget,” he said. “There would be no room for tax relief and a fairly high probability we’d leave a high-ending fund balance (surplus) for the 2017 Legislature.”

But if the governor office’s estimate is right and the legislature failed to adopt it, the state surplus could soar as high as $600 million, Tutvedt said .

A big decision for the legislature is how to pay for the $391 million in infrastructure investment the governor and some lawmakers propose. Bullock wants to come up with $212 million through bonds and pay for the rest in cash. But Republican legislative leaders are wary of bonding that much and would prefer to use excess cash.

The governor office’s revenue estimates generally have proved more accurate in recent legislative sessions, but the two offices were not far apart in 2013.

As governor, Bullock has the final say because he must sign, veto or line-item spending bills. He wants a $300 million budget surplus to serve as a rainy day fund, just as he did two years ago. In 2013, the governor vetoed $150 million in spending bills to make sure the projected surplus would hit the $300 million he sought.