Proposed Budget - Fiscal Year 2024-2025
On November 15, 2022, Montana Governor Greg Gianforte released his budget proposal for the fiscal 2024-2025 biennium. The budget recommends $7.10 billion in all funds spending in fiscal 2024, an 8.5 percent increase from fiscal 2023. Fiscal 2025 calls for $7.33 billion in all funds spending, a 3.2 percent increase from fiscal 2024’s recommended level. General fund total disbursements are recommended at $2.79 billion in fiscal 2024, a 44.6 percent decline from fiscal 2023. Much of the decline is due to less one-time investments and transfers in fiscal 2024 compared to fiscal 2023.
When looking at only general fund base spending, fiscal 2024 recommended spending is $2.34 billion, a 0.3 percent decline from fiscal 2024. General fund base spending in fiscal 2025 is recommended to be flat compared to fiscal 2024’s proposed level. The general fund ending balance is projected at $638.3 million in fiscal 2024 and $525.0 million in fiscal 2025. General fund revenue from major taxes is projected to increase 5.3 percent in fiscal 2024 and 3.4 percent in fiscal 2025, while total general fund revenue is projected to decline 1.9 percent in fiscal 2024 and rise 2.6 percent in fiscal 2025. The recommended budget also includes a combined $1 billion in property and income tax relief.
Proposed Budget Highlights
The governor’s “Budget for Montana Families” prioritizes cutting taxes, holding the line on spending, and making Montana communities and families safer, more secure, and stronger. The governor said the budget provides Montanans with the largest tax cut in state history, while also supporting parents by providing a tax credit for young children and an adoption tax credit. Additionally, the governor said the state should use its historic surplus to repair what needs fixing, save for emergencies, and pay off debt. Highlights of the recommended budget include:
Tax Reform
- $500 million in permanent income tax cuts and $500 million in property tax relief over the next two years.
- Reduces the personal income tax rate from 6.5 percent to 5.9 percent for most taxpayers.
- Calls for property tax reform including greater transparency and accountability in local government spending and an option to pay property taxes monthly.
- Provides families with a $1,200 child tax credit for children under six years of age, as well as a $5,000 adoption tax credit.
Rainy Day Fund Growth and Debt Repayments
- Doubles the size of the state’s rainy day fund.
- Nearly triples the size of Montana’s fire suppression fund and invests $10 million per year to expand the scope of active forest management.
- Pays off all general obligation debt, saving approximately $40 million over the biennium.
Behavioral Health and Drug Treatment Funding
- $300 million investment for improvements and repairs at the Montana State Hospital, intensive behavioral health care, and community-based services for out-patient care across the state.
- Boosts funding by 50 percent for the governor’s HEART Fund initiative, and permanently funds eight drug treatment courts that are losing federal funding.
Infrastructure Improvements
- $200 million to repair and expand the Montana State Prison.
- $200 million to expand water and sewer infrastructure.
Job Creation and Educational Opportunities
- Expands the business equipment tax exemption from $300,000 to $1 million.
- Nearly doubles the Montana Trades Education Credit for employers to send their employees to learn a trade.
- Doubles the cap of the Big Sky Scholarship to ensure students have access to the best education possible.
- Increases funding by 40 percent for the TEACH Act to increase starting teacher pay.
Public Safety Investments
- Funds 16 new highway patrol officers and criminal investigators, as well as six new prosecutors at the Montana Department of Justice.