Proposed Budget - Fiscal Years 2026-2027
On November 15, 2024, Montana Governor Greg Gianforte released his budget proposal for the fiscal 2026-2027 biennium. The budget recommends $8.02 billion in all funds spending in fiscal 2026, a 2.5 percent increase from fiscal 2025. Fiscal 2027 calls for $8.25 billion in all funds spending, a 2.9 percent increase from fiscal 2026’s recommended level. General fund total investments, expenditures and liabilities are recommended at $3.09 billion in fiscal 2026, a 17.9 percent decline from fiscal 2025, and $3.49 billion in fiscal 2027, a 12.9 percent increase from fiscal 2026’s recommended level. Much of the decline in fiscal 2026 is due to less one-time spending compared to fiscal 2025, while much of the increase in fiscal 2027 is due to greater one-time spending than fiscal 2026’s recommended level. The general fund base budget calls for flat spending in both fiscal 2026 and fiscal 2027. The general fund ending balance is projected at $809.2 million in fiscal 2026 and $555.2 million in fiscal 2027. Total general fund revenues are projected to increase 4.9 percent in fiscal 2026 and 1.6 percent in fiscal 2027. General fund revenues in both years were impacted by a series of changes including the return of interest earnings which were previously redirected, the diversion of the 95 mill property tax to the state special revenue fund, and a reduction to the top marginal income tax rate.
Key Budget Highlights
The governor’s “Path to Security and Prosperity” builds upon previous, successful collaborations with legislators and focuses on shoring up the foundation of a prosperous society through economic freedom, safe communities, and strong families. The governor’s budget proposal prioritizes cutting income taxes, reducing property taxes for primary homeowners, and investing in public safety, education, and Montana’s future. Additionally, the governor noted the budget keeps spending growth below inflation, has a strong ending balance to protect against economic and financial uncertainty, and avoids cuts to essential services. Highlights of the recommended budget include:
Tax Reform
- Includes the largest income tax cut in state history, reducing the income tax rate most Montanans pay from 5.9 percent to 4.9 percent
- Substantially boosts the earned income tax credit to benefit lower- and middle-income Montanans
- Lowers property taxes for Montana homeowners by 15 percent and for small businesses by 18 percent
- Expands the business equipment tax exemption from $1 million to $3 million
Public Safety
- Increases the pay of Montana Highway Patrol troopers as well as includes greater funding support
- Makes a historic investment to expand the state prison
- Provides one-time-only funding to develop and execute a long-term plan to keep communities safe
Substance Abuse
- Proposes additional resources for communities to address the opioid epidemic
- Increases support for drug treatment courts
Education
- Protects record funding in public education
- Builds on the success of the governor’s TEACH Act by raising teacher pay
- Expands educational opportunities including through increasing Big Sky Scholarship funding
- Includes one-time-only funding to create incentives for school districts to adopt “cell phone-free” school policies
- Adds funding to the School Facilities Trust to help local school districts with deferred maintenance
Other Investments
- Provides funding to speed up the construction of affordable, attainable housing
- Support to repair 500 bridges over the next five years
- Funding for local disaster relief
- One-time-only funding to protect state pensions and taxpayers from downturns in the economy