- Associated Press - Thursday, September 24, 2015

HELENA, Mont. (AP) - Montana has $90 million more than anticipated for emergencies or unforeseen costs thanks largely to an unexpected boost in income taxes, legislative analysts told lawmakers Thursday.

That revenue, along with unspent emergency funds and lower-than-usual costs, put the state’s reserves at about $455 million at the June 30 end of the 2015 fiscal year.

Montana brought in $2.2 billion from July 2014 through June, according to a year-end report from the Legislative Fiscal Division. Additional revenue totaled $45.7 million, mostly from personal income taxes.

“That’s kind of exciting for Montana,” said Stephanie Morrison, a senior fiscal analyst at the division.

Income tax collection was about 3 percent, or $33.3 million, higher than anticipated. It appears that the unforeseen increase in individual income taxes is due to growth in the stock market, not higher-than-expected wages, Morrison said.



The Transactional Records Access Clearinghouse recently ranked Montana’s average per capita income the second-lowest in the nation. State officials had expected wages to increase by 6.2 percent in the 2015 fiscal year, but preliminary data suggests they grew by 4.2 percent, Morrison said.

She later told the Revenue and Transportation Interim Committee that a national study points to flaws in Montana’s forecasting of income taxes.

Fiscal analysts plan to present concrete conclusions about what caused the spike in December.

“We have not received tax return information that will shed more light on what actually happened and what sorts of incomes taxpayers actually received,” Morrison said.

Corporate income tax collections came in $18.5 million higher than anticipated. Fiscal analyst Sam Schaefer said that’s due almost entirely to a large, one-time audit.

The governor was granted $16 million in emergency funds to distribute throughout the year and only used $2.5 million of it. The remaining amount was transferred to Montana’s fire suppression fund.

The state spent $35.6 million less overall than expected, $13.8 million of which was saved in the Department of Public Health and Human Services alone. The report shows Medicaid and other health services costs came in $13.1 million under budget.

“Many things cost less than the departments had accrued to be expended in 2014, so there were some savings there,” Legislative Fiscal Division Director Amy Carlson said.

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This story has been corrected to show the state’s fund balances are current as of June 30.

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