Republicans: New Revenue Numbers Justify Budget Cuts

Posted on March 17, 2011

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By CODY BLOOMSBURG

HELENA — New revenue estimates presented to the House Taxation Committee Thursday did little to change the ongoing debate over the budget.

As the panel heard arguments on the resolution to adopt estimates, it was clear that Republicans still want to hold to November numbers and Democrats want to update to higher figures.

“When I turn this over to you guys I want you to think about things,” Rep. Roy Hollandsworth, R-Brady, told the committee as he presented the resolution.

Hollandsworth said the volatile situation in the Middle East and the recent disaster in Japan would be putting further strains on the U.S. economy, and he cautioned the group against adopting higher projections even though the Legislative Fiscal Division’s March figures are $63.5 million more than the numbers used in the Legislature’s current budget.

Hollandsworth, the resolution’s sponsor, said later that he would be inclined to resist any amendments, such as raising the figures, but he would look at them.

Terry Johnson, the LFD’s head analyst, followed Hollandsworth by going over the newest estimates. He said changes to federal tax law brought the projections down from what he presented last month by about $33.5 million. But the reason behind the increase was still due to fewer tax refunds being disbursed and not because of  improvement in the economy.

The division’s report states “most economic conditions showed minimal change or slight improvement” from the November estimates.

No one testified  in favor of the resolution, but advocates for human service organizations asked that the lawmakers accept the larger figures and thereby spare their programs from budget cuts.

The most vocal opponent, however, was Gov. Brain Schweitzer’s budget director, David Ewer.

He said his office used a different method for calculating the money to come, which put more weight the amount of revenue the state has already brought in compared to what it had last year. It also generated a larger number than Johnson’s.

By Ewer’s count, revenue figures would have to drop from being 10 percent above last year’s rate to 2.3 percent below it to meet Johnson’s figures, which he said was a ridiculous idea.

Johnson, however, said earlier that changes to a few  government computer systems last year made revenue come in on a far different timeline. And comparing the two years doesn’t add up.

“It’s just an erroneous comparison to make,” Johnson said.

The committee took no action on the resolution.

– Reporter Cody Bloomsburg can be reached at 208-816-0809 or by e-mail at crbloomsburg@hotmail.com

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