Governor’s budget withholds marijuana tax funds from FWP programs
(Missoula Current) Conservationists are anticipating another Legislative battle for Montana Fish, Wildlife & Parks funding after seeing a draft budget from the Governor’s Office.
After Gov. Greg Gianforte released his draft budget last week, some Montanans were disappointed to see that conservation programs weren’t slated to get as much money as they expected.
The governor’s draft budget for the next biennium, which runs from June 2023 to June 2025, fails to give three FWP programs the full amount of funding that voters approved by constitutional initiative in 2020.
Gianforte said other priorities were in play.
“After hearing from FWP that its public lands funding is healthy and bountiful, the governor proposes marijuana tax revenue be used to support Montana veterans and their spouses, strengthen treatment services, and boost law enforcement to make our communities safer and stronger," Gianforte's office said Tuesday evening. "Rather than reach out to the governor’s office with questions, the Missoula Current’s reporter published a blogpost that shows a complete disregard for journalistic ethics and standards.”
In June, the Legislative Fiscal Division released an extensive report that predicted a $1.7 billion surplus by the start in the upcoming biennium thanks to the past two years of federal economic stimulus bills, population growth spurred by the pandemic, a rising stock market in 2021 and inflation.
However, revenues will decrease in fiscal year 2023, according to the report, although that’s not likely to be the case for marijuana sales.
“It’s disappointing,” said Marne Hayes, Business for Montana’s Outdoors director in a release. “Montanans have made it clear that they want more dedicated funding investments for our outdoors. We will keep pushing for strong investments in the outdoor economy that so many businesses and communities depend on.”
In November 2020, with about 57% of the vote, Montanans passed Constitutional Initiative 190, legalizing recreational marijuana for adults but also tacking on a 20% sales tax, which went into effect in January 2022.
Under the Initiative, the state’s general fund was to receive 10.5% of the tax money and about half of the remainder would go to public lands programs, including State Parks, FWP’s Habitat Montana Fund and other wildlife programs.
But the 2021 Legislature changed that somewhat with House Bill 701. After earmarking $6 million for Gianforte’s Healing and Ending Addiction through Recovery and Treatment program, legislators gave 20% of the remainder to Habitat Montana - instead of almost 40% promised in CI-190 - and 4% each to State Parks and the nongame wildlife program.
While early estimates predicted the tax would raise $48 million annually within five years of the initiative, state estimates now predict a total revenue of $171 million for the next biennium, almost double the original projections. Based on that, conservationists say about $50 million should go to FWP under HB701.
But Gianforte’s draft budget doesn’t follow the HB701 rules for divvying up the marijuana tax money, according to an analysis highlighted by three organizations: Business for Montana’s Outdoors, Montana Backcountry Hunters and Anglers, and Wild Montana.
In the governor’s draft budget, it appears that Habitat Montana would receive no tax money. The budget does boost Habitat Montana’s overall allocation to $12 million, 3.8% more than in the last biennium. But all the state money - $9.65 million - comes from sportsmen’s license dollars.
FWP’s Habitat Montana program has long provided funding for FWP to buy conservation easements and fee title land to preserve quality wildlife habitat. Most recently, Habitat Montana money helped buy almost 9 square miles for a wildlife management area in the foothills of the Big Snowy Mountain south of Lewistown.
“The proposed 3.8% increase to the Habitat Montana account is a good starting point that can eventually go up,” said John Sullivan, board chair for the Montana Chapter of Backcountry Hunters and Anglers. “We think using the projected cannabis revenue for public access as voters intended is important for Governor Gianforte to make good on his promise to improve the public access situation in Montana.”
In accordance with HB107, the draft budget provides 4% each to Montana State Parks, trails and recreation facilities, and nongame wildlife, according to a Gianforte spokesperson.
Biologists with the nongame wildlife program take care of a vast amount of Montana species, everything from sapsuckers to porcupines. They can get overlooked in an agency that depends on big game animals to bring in the revenue.
Montana State Parks must have the resources to manage and maintain 55 state parks. In addition, a recent FWP reorganization now requires the division to also oversee fishing access sites and wildlife management areas.
Another 4% of the tax money went toward trails and recreation. Based on this draft budget, however, it’s unknown whether any marijuana tax revenue will be added to Montana’s Trail Stewardship Grant program.
This is not the first time Gianforte wrote conservation programs out of his budget. Two years ago, his FY22-23 budget gave no marijuana tax money to FWP programs. But the executive budget proposal can differ greatly from what the Legislature finally approves.
“Our goal next year will be to ensure all these funds are accounted for in the final budget so they can be used as intended to support State Parks and public trails, and to improve our opportunities to hunt, fish, hike, and camp," said Noah Marion, Wild Montana State Policy Director.
Gianforte said he wants to use the surplus to cut income and property taxes by $1 billion. His budget reduces the income tax rate most Montanans pay from 6.5% to 5.9% and would cut property taxes by $500 million over the next two years.
He would also increase the business equipment tax exemption from $300,000 to $1 million. Such changes could strain the budget once the state no longer has a surplus, some analysts suggest.
But Gianforte also proposes doubling the state’s rainy-day fund. The fund is currently set to hold $117 million, which would keep the state running for about 16 days, according to the Pew Charitable Trust.
“While our budget is historic for its tax cuts and critical, prudent investments, our budget is also fiscally responsible,” Gianforte said in a release.
Contact reporter Laura Lundquist at firstname.lastname@example.org.