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Lawmakers review state "rainy day" tools, limits on executive cuts and fund flows
Summary
Legislative Fiscal Division staff briefed committee members on Montana's reserve funds (budget stabilization reserve, capital development, wildfire and debt/liability-free funds), how money flows into them, and statutory limits on executive budget reductions tied to those reserves.
Susie Lindsay, of the Legislative Fiscal Division, told the committee the session would begin with training on the state's short-term financial stability tools and how they operate. "I'm here to talk to you today about our current tools that we use, to manage, short term risk, for state finances," Lindsay said.
The presentation explained four principal mechanisms the state uses to smooth revenue volatility: the Budget Stabilization Reserve Fund (BSRF), the Capital Development Fund (sometimes described as a "working rainy day" fund), several targeted state special funds including a debt-and-liability fund, and a wildfire fund. Lindsay said the BSRF was established in 2017 and "saw its first flow in" 2019; she told members the fund stood at about $522,000,000 and is at a statutory cap of 16% of general revenue appropriations for the second year of the biennium.
Lindsay and fiscal staff…
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