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1 HOUSE JOINT RESOLUTION NO. 2
2 INTRODUCED BY B. BEARD
3 BY REQUEST OF THE REVENUE INTERIM COMMITTEE
4
5 A JOINT RESOLUTION OF THE SENATE AND THE HOUSE OF REPRESENTATIVES OF THE STATE OF MONTANA ESTABLISHING AN
6 OFFICIAL ESTIMATE OF THE STATE'S GENERAL FUND REVENUE FOR FISCAL YEAR 2021 AND EACH FISCAL YEAR OF THE 2022-2023
7 BIENNIUM FOR THE PURPOSE OF ACHIEVING A BALANCED BUDGET AS REQUIRED BY ARTICLE VIII, SECTION 9, OF THE MONTANA
8 CONSTITUTION; ACCEPTING A PRELIMINARY UNASSIGNED GENERAL FUND BALANCE; ESTABLISHING OFFICIAL ESTIMATES OF
9 CERTAIN NONGENERAL FUND REVENUE; AND REQUESTING THAT THE GOVERNOR'S OFFICE OF BUDGET AND PROGRAM
10 PLANNING USE THE REVENUE ESTIMATES CONTAINED IN THIS RESOLUTION AS OFFICIAL ESTIMATES FOR FISCAL YEARS 2021,
11 2022, AND 2023.
12
13 WHEREAS, Article VI, section 9, of the Montana Constitution requires the Governor to submit to the Legislature a budget for the ensuing
14 fiscal period, containing in detail for all operating funds the proposed expenditures and estimated revenue of the state; and
15 WHEREAS, Article VIII, section 9, of the Montana Constitution prohibits the Legislature from appropriating funds in excess of the
16 anticipated revenue of the state; and
17 WHEREAS, section 5-5-227(2), MCA, requires the Revenue Interim Committee to estimate the amount of revenue projected to be
18 available for legislative appropriation and to introduce a resolution setting forth the Committee's current revenue estimate; and
19 WHEREAS, section 5-5-227(3), MCA, expresses the Legislature's intent that its revenue estimates and the underlying assumptions used
20 to derive those estimates be used by all agencies in the development of fiscal notes; and
21 WHEREAS, the Revenue Interim Committee obtained the assistance of the Legislative Fiscal Analyst in the development of the revenue
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1 estimates; and
2 WHEREAS, the Revenue Interim Committee also obtained the assistance of Executive Branch agencies in the development of the
3 revenue estimates; and
4 WHEREAS, the Revenue Interim Committee has adopted revenue estimates and the underlying assumptions used to derive those
5 estimates for the general fund and for specific nongeneral fund sources that are significant in the development of the state budget for fiscal year
6 2021 and the 2022-2023 biennium; and
7 WHEREAS, section 5-5-227(3), MCA, provides that the Revenue Interim Committee's estimate, as introduced in the Legislature,
8 constitutes the Legislature's current revenue estimate until amended or until final adoption of the estimate by both houses; and
9 WHEREAS, the amount of estimated revenue and the general fund balance affects policy decisions of the Executive Branch and the
10 Legislative Branch; and
11 WHEREAS, the revenue estimates and the underlying assumptions contained in this resolution provide the basis for a comprehensive
12 analysis of the state's revenue condition.
13
14 NOW, THEREFORE, BE IT RESOLVED BY THE SENATE AND THE HOUSE OF REPRESENTATIVES OF THE STATE OF MONTANA:
15 That the state general fund revenue for fiscal years 2021, 2022, and 2023 be estimated to be $2,469,233,000, $2,537,695,000, and
16 $2,647,666,000, respectively.
17 BE IT FURTHER RESOLVED, that the Legislature accept for budget purposes the preliminary unassigned fiscal year 2020 fund balance
18 of $452,411,472 for the general fund, prepared according to generally accepted accounting principles.
19 BE IT FURTHER RESOLVED, that the Governor's Office of Budget and Program Planning use the revenue estimates and the underlying
20 assumptions contained in this resolution as the official revenue estimates for fiscal years 2021, 2022, and 2023.
21 GENERAL FUND REVENUE
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1 The projections for general fund revenue for fiscal years 2021, 2022, and 2023 are based on the assumptions of the continuation of
2 Montana and federal law as it existed on January 1, 2021. The revenue estimates contained in the following tables are based on the assumptions
3 listed in the tables that follow the general fund estimates and the assumptions for each general fund revenue source (as adopted by the Revenue
4 Interim Committee) contained in the "Legislative Budget Analysis, 2023 Biennium, Volume 2 -- Revenue Estimates" prepared by the Legislative
5 Fiscal Division.
6 Current Law
7 General Fund Revenue Estimates
8 (In Millions of Dollars)
Actual Estimated Estimated Estimated
Source of Revenue FY 2020 FY 2021 FY 2022 FY 2023
Largest Seven Sources
Individual Income Tax $1,435.240 $1,404.584 $1,443.769 $1,523.161
Property Tax 308.610 313.021 333.017 339.825
Corporation Income Tax 187.358 156.256 163.528 168.808
Vehicle Taxes & Fees 108.482 109.273 110.402 111.384
Oil & Natural Gas Production Tax 38.380 36.488 40.402 41.002
Insurance Tax & License Fees 82.489 86.072 84.780 87.767
Video Gambling Tax 57.447 60.320 63.336 66.503
Largest Seven Sources Subtotal 2,218.007 2,166.012 2,239.233 2,338.449
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Other Business Taxes
Driver's License Fee 4.410 4.029 4.053 4.071
Investment License Fee 15.711 16.385 16.524 16.866
Lodging Taxes 25.058 20.878 30.589 36.378
Public Contractors Tax 6.729 4.987 5.103 5.206
Railroad Car Tax 4.294 4.305 4.393 5.140
Rental Car Sales Tax 4.224 3.823 4.727 5.219
Telecommunications Excise Tax 11.788 10.954 10.085 9.190
Other Business Taxes Subtotal 72.213 65.361 75.473 82.070
Other Natural Resource Taxes
Coal Severance Tax 10.920 10.966 10.812 10.648
Electrical Energy Tax 3.910 4.480 4.223 4.203
Metalliferous Mines Tax 8.724 9.922 8.038 8.222
US Mineral Royalty 18.527 18.729 17.909 17.221
Wholesale Energy Tax 3.351 3.467 3.460 3.466
Other Natural Resource Taxes Subtotal 45.432 47.563 44.442 43.760
Other Interest Earnings
Coal Trust Interest 21.600 17.904 16.828 15.700
Treasury Cash Account Interest 18.597 2.740 1.582 1.724
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Other Interest Earnings Subtotal 40.197 20.645 18.409 17.424
Other Consumption Taxes
Beer Tax 3.167 3.102 3.111 3.117
Cigarette Tax 26.983 27.045 26.558 26.113
Liquor Excise & License Tax 23.786 24.930 26.426 28.014
Liquor Profits 18.080 15.800 15.800 16.900
Lottery Profits 8.073 13.144 13.021 13.145
Tobacco Tax 5.754 5.724 5.627 5.565
Wine Tax 2.522 2.579 2.637 2.697
Other Consumption Taxes Subtotal 88.364 92.323 93.179 95.550
Other Sources
All Other Revenue 46.062 44.685 44.075 46.685
Highway Patrol Fines 3.458 3.691 3.670 3.607
Nursing Facilities Fee 4.188 3.992 3.896 3.799
Public Institution Reimbursements 12.745 12.555 12.382 13.410
Tobacco Settlement 2.654 12.406 2.936 2.912
Other Sources Subtotal 69.107 77.329 66.958 70.413
Total General Fund $2,533.321 $2,469.233 $2,537.695 $2,647.666
1
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1 SIGNIFICANT ASSUMPTIONS FOR GENERAL FUND REVENUE ESTIMATES
2 Year Assumption 2020 2021 2022 2023
Largest Seven Sources
Individual Income Tax
CY Wage & salary income growth -0.6% 4.2% 3.6% 3.8%
CY Interest income growth -2.8% -1.2% -0.1% 0.7%
CY Dividend income growth 0.6% -5.6% 1.4% 5.5%
CY Taxable refunds growth 0.0% 0.0% 0.0% 0.0%
CY Alimony received growth -7.1% -7.1% -7.1% -7.1%
CY Net business growth 0.5% 2.1% -0.1% 2.3%
CY Capital gains income growth -2.1% -1.6% -1.1% 1.8%
CY Supplemental gains income growth 0.0% 0.0% 0.0% 0.0%
CY Rents, royalties & partnership income growth -1.2% 3.1% 5.2% 6.7%
CY IRA income growth -13.2% 29.5% 5.1% 4.9%
CY Taxable pension income growth 5.5% 5.0% 4.9% 4.5%
CY Taxable social security income growth 7.1% 6.1% 4.4% 4.3%
CY Farm income growth 0.0% 0.0% 0.0% 0.0%
CY Unemployment compensation growth 1076.4% -91.5% 0.0% 0.0%
CY Other income growth 0.0% 0.0% 0.0% 0.0%
CY Total additions (Millions) $838.411 $837.533 $835.456 $834.458
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CY Total adjustments (Millions) $518.665 $533.578 $548.492 $563.406
CY Total reductions (Millions) $1,903.006 $1,996.333 $2,094.979 $2,199.011
CY Federal inflation factor 1.6% 1.9% 2.0% 1.6%
CY State inflation factor 0.9% 3.0% 2.3% 1.8%
CY Full year resident adjustment 97.0% 102.3% 100.7% 100.7%
CY Non-resident adjustment 105.1% 105.1% 105.1% 105.1%
FY Earned income tax credit (Millions) $5.031 $5.210 $5.290 $5.311
CY Elderly homeowner/renter credits (Millions) $7.385 $7.131 $6.846 $6.621
CY All other credits (Millions) $65.174 $66.145 $68.763 $72.274
FY Audit, penalty & interest collections (Millions) $53.397 $56.280 $58.577
Revenue Interim Committee Adjustment (Millions) -$30.160 -$30.160 -$30.160
Property Tax
FY Class 1 taxable value (Millions) $4.745 $5.747 $5.014
FY Class 2 taxable value (Millions) $31.695 $30.409 $26.528
FY Class 3 taxable value (Millions) $157.219 $162.025 $161.889
FY Class 4 taxable value (Millions) $1,987.610 $2,196.052 $2,236.569
FY Class 5 taxable value (Millions) $50.769 $51.877 $53.009
FY Class 7 taxable value (Millions) $0.003 $0.003 $0.003
FY Class 8 taxable value (Millions) $163.006 $163.657 $164.311
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FY Class 9 taxable value (Millions) $535.254 $567.495 $601.677
FY Class 10 taxable value (Millions) $4.870 $4.858 $4.846
FY Class 12 taxable value (Millions) $101.163 $106.077 $110.907
FY Class 13 taxable value (Millions) $162.733 $158.349 $154.082
FY Class 14 taxable value (Millions) $17.567 $17.693 $17.819
FY Class 15 taxable value (Millions) $1.830 $1.751 $1.675
FY Abatement value (Millions) $26.392 $28.422 $29.015
FY TIF Value (Millions) $49.924 $52.985 $53.311
Corporation Income Tax
CY WTI price ($/bbl) $38.7 $46.0 $54.4 $56.1
CY Domestic crude price ($/bbl) $39.4 $45.7 $54.3 $54.9
CY Montana retail sales (Millions) $18,693 $19,623 $19,481 $19,842
CY Montana median home price ($) $270,945 $278,815 $288,384 $298,767
CY Montana population (Thousands) 1,075.4 1,079.8 1,084.6 1,089.5
CY Wholesale employment (Thousands) 17.2 17.5 18.3 18.8
CY 3-month commercial paper 0.6% 0.2% 0.3% 0.3%
FY Audit, penalty & interest collections (Millions) $17.056 $16.174 $16.897
FY Refunds (Millions) -$27.290 -$25.879 -$27.035
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Vehicles Vehicle Taxes & Fees
FY Montana new vehicle sales (Thousands) 49.026 54.069 56.677
FY US new vehicle sales (Millions) 15.211 15.593 15.782
FY US total vehicle stock (Millions) 291.245 293.240 295.319
Oil & Natural Gas Production Tax
CY WTI price ($/bbl) $38.661 $46.040 $54.416 $56.098
CY Montana oil price ratio 0.880 0.880 0.880 0.880
CY Total oil production (Million barrels) 18.294 15.789 14.636 13.639
CY Holiday oil production (Million barre