Bill to move state’s surplus, long-term investment tabled
(UM Legislative News Service) The Senate Local Government Committee tabled a bill on a party-line vote that would have moved $2 billion of the state's surplus into the coal severance tax trust fund.
Sen. Ryan Lynch, D-Butte, sponsored Senate Bill 346, which would have taken 80% of the state’s surplus and set it aside in the state controlled trust fund that would accrue interest over time.
“It’s a very simple bill, and it builds on the legacy that has been laid out before us by a number of different folks that have sat in your seats, and my seat,” Lynch said.
The state’s more than $2 billion surplus, and where it should go, has been a dominating debate in the first half of the 2023 Legislative session.
The interest rate on the coal endowment trust lies at about 3-3.5% which currently generates around $35 million every year, with it currently sitting at around $1 billion. The addition of $2 billion could generate close to an additional $80 million a year in interest.
Lynch said right now there’s an abundance of money, and that the state constitution lays out the ability for this money to be moved from the general fund into this trust so that the money can flow steadily and touch every part of Montana.
“I think as we save money, really you could put this in the category of a long-term property tax reduction, when you start talking about infrastructure and water, regional waters, when you talk about jobs and economic development,” Lynch said.
Sen. Dan Bartel, R-Lewistown, was a supporter of the bill and said that he wants to see another option being left out there for the legislators when it comes to balancing the budget and what to do with the surplus.
“We need to put this option in our toolbox to address the revenue surplus that seems to be growing every day,” Bartel said. “I just think this would be great and I think it would be a great opportunity to put money in for the future generations.”
There were no opponents at the bill’s hearing, but the committee raised several concerns about the impact this would have on other legislation currently going through, specifically the tax cut proposals.
“Budgets are about decisions and options, certainly I think that with the tax cuts that have already gone through there's enough room in the general fund balance for this to go,” Lynch said.
The Montana Legislature has a constitutional requirement to provide a balanced budget each session.