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State of the State

February 16, 2011 J

In recent weeks I have read the opinions of several of our state officials including both Minority Leaders of the Montana House and Senate. In addition, I listened with great interest to our Governor’s State of the State address. It is their belief that our state government is living within its means, creating jobs, cutting taxes and sitting on a pile of cash just waiting to be spent, by politicians, for the good of the public. However, outside the confines of the State Capitol, the reality for the taxpayer is very different.

Since 2005, the state’s budget has grown by an amazing 47%, far out stripping our population growth or the inflation rate. How many of you have seen your household budget increase at such a rate? Currently the State budget is structurally out of balance by more than $300 million. This means that on going expenses exceed the tax revenues that are coming into the state coffers. The Governor and his supporter believe that one time only money (example: Otter Creek payment from Arch Coal) should be spent to close the financial short fall. Responsible citizens don’t operate their personal finances that way and neither should our government. Equally troubling is our dependence on the Federal Government to balance our budget, currently 44.3% of our State budget is Federal dollars. Everyone knows that the Feds are broke and at some point they will have to cut back, making Montana’s financial position even more unsustainable.

In 2005 Montana’s unemployment rate stood at 4.0%, today it is 7.2%. In 2005 we had 11214 state employees, as of today we have 12267, an increase of 10%. So as the private sector employment decreased as a percentage of the population, the public sector has increased. In addition many of these state jobs pay high wages and are increasing at a rate that can’t be maintained. Currently there are 780 state employees making in excess of $100,000, just 2 years ago there were 502. Keep in mind that Montana workers rank in the bottom 25% (39th) among the states in personal income.

The Governor on numerous occasions has touted his tax cutting prowess and reminds us that he returned 90 million to us in 2007 in the form of a one time property tax rebate. What he neglects to remind you about is the multitude of fee increases he signed into law in 2005 that have generated 183 million dollars of revenue for the state of Montana. Money that you could have used to pay for medical bills, pay down your mortgage or pay for a child’s college tuition.

It is true that the State of Montana has avoided to some degree the severity of the economic downturn faced by other members of our Union. It is also true that we are currently sitting on in excess of 300 million in cash. However the majority of the money is from One Time Only sources and should not be used to fund ongoing government programs. Instead the majority of this money should be returned to the hardworking people of Montana and the private businesses that paid it in. This money would be more wisely invested and spent by the private sector and would help provide the capital that is sorely needed to expand our free enterprise economy.

We must remember that before Government can give to one citizen it must take it from another thus gaining control of both. Our Nation’s greatness was built upon the foundations of limited government, free enterprise, individual freedom and responsibility. It is imperative that we return our State and Nation to these values that in the past have served us well. All of the statistics were generated by the Montana Legislative Fiscal Division: http://leg.mt.gov/fiscal

Scott Sales
Americans for Prosperity State Director
Former Speaker of the Montana House of Representatives

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