AnEarlyLookatthe2019BiennialBudget:MontanaNeedsaBalancedApproachtothe

State’sRevenueChallengesJanuary2017

Montananscaredeeplyaboutthewellbeingoftheirfamiliesandcommunities.Theywantahopefulandprosperousfuturefortheirchildrenandneighbors,safecommunities,andastrongstateeconomythatsupportsqualityjobsandthrivingbusinesses.AsMontanans,wehavecometogetheratmanypivotalmomentsinourstate’shistorytocollectivelybuildtowardthesegoals.Together,wehaveconsiderednotonlywhatwecanaffordtoaccomplishtoday,butalsotheinvestmentswemustmaketoprotectourfuture.DuringMontana’s2017legislativesession,electedofficialsshouldbefocusedonwiselyincreasingandusingthestate’sresourcestohelpbuildopportunitiesandapathtoprosperityforallMontanansthroughthebudgetcreationprocess.Arecent,butshort-term,declineinstaterevenue,causedprimarilybydeclinesincorporateincomeandoilandnaturalgastaxesandslowerthananticipatedgrowthinindividualincometaxes,hascreatedsignificantchallengesforthestate’selectedofficials.Theproposedexecutivebudgetcreatesaresponsibleblueprintforaddressingthesechallengesthroughabalancedapproachthatincludesacombinationofdifficultcutsandtargetedrevenueenhancersthatbringmoretaxfairnesstooursystemandensureadequatelevelsofrevenue.Unfortunately,keylegislativeleadershaveindicatedadangerousunwillingnesstoacceptthisbalancedapproachandhaveinsteadstartedthebudgetprocessbyimposingadditionaldeep,unnecessary,andharmfulcuts.1DecliningRevenueandWhatItMeansforthe2019BienniumBudgetRecentrevenuedeclinesarethreateningMontana’sabilitytoadequatelyinvestinthepublicstructuresandservicesthateducateourchildren,keepourcommunitiessafe,protectourlandandwater,andprovidehealthcareandotherserviceswhenMontanansstruggletomakeendsmeet.Revenueforthecurrent2017bienniumisexpectedtoberoughly$300millionlowerthanthe2015Legislatureanticipated.Attheconclusionofthe2017budgetcycle,theendinggeneralfundbalanceisexpectedtobe$79million,or$236millionlessthanwasprojectedin2015.2Ingeneral,thatreductionmustbemadeupwithsomecombinationofbudgetcuts,revenueenhancers,orfundtransfers.TheProposedExecutiveBudgetOffersaBalancedApproachtotheState’sRevenueChallengesBeforeeverylegislativesession,thegovernorproposesabudgetforthenextbienniumbasedonprojectedrevenueestimatesforthesameperiod.Thatexecutivebudgetisevaluatedbythelegislature’sstaffbeforethesessionandservesasastartingpointforlegislativechangestothebudget.3Thegovernor’sproposedbudgetforthe2019bienniumincludesapackageofbudgetcuts,revenueenhancers,andfundtransfers.4

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Thesemeasuresincludeapproximately:

• $109million($74millioninHB2)ingeneralfundcutsfromwhatwouldhavebeenapresentlawbudget.InHouseBill2alone,theexecutivebudgetassumestotalfundreductionsexceeding$346million,whichincludes$55millioninreductionstostatespecialrevenuefundingand$217millioninlostfederalmatchingfunds.ThelossoffederalfundsoccurwithintheMontanaDepartmentofTransportation(MDT)andMontanaDepartmentofPublicHealthandHumanServices(DPHHS).

• $77millioninnewexpenditures($38millionincludedinHB2).Newproposalsinclude,forexample,fundingforearlyeducation,youthsuicideprevention,stateemployeepayplanincreasesof1%peryear,andincreasedfundingforareaagenciesonaging.

• $156millioninnew

revenue($123millioningeneralfundrevenue),mostofwhichcomesthroughincreasingtaxesonMontana’shighestincomeearners.SeeAppendixAforalistofnewrevenuesources.

• $7millioninrevenuereductions,including$5millionforastateearnedincomecreditforworkinglow-incomefamiliesinMontana.5

• $83millioninone-time-onlytransfersfromstatespecialrevenuefundsintothegeneral

fund,including$56millionfrominfrastructurefundsthattheexecutivewouldreplacewithbonding.

• $55millioningeneralfundsavingsbyfundingcertainprogramsfromstatespecialrevenue

thatpreviouslyhavebeenfundedbygeneralfunddollars.Forexample,fundingforsomeMedicaidcaseloadandmentalhealthserviceswouldbeswitchedfromgeneralfundtotobaccotaxandwinetaxstatespecialrevenueaccountsrespectively.Increasesinthoseconsumptiontaxeswouldfundtheswitch.

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• Ageneralfundendingfundbalanceof$300millionforthe2019biennium.Becausethe

statedoesnothaveaconstitutionallyorstatutorilyrequired“rainydayfund,”theendingfundbalanceistheonlymechanismfordealingwithrevenueuncertaintyorvolatilitybetweenlegislativesessions.

Notethatwithouttheexecutive’sproposedrevenueenhancements,roughly$156millioninadditionalgeneralfundcutsfromtheproposedbudgetwouldbenecessarytoachievea$300millionendingfundbalanceforthe2019biennium.EarlyLegislativeActionTroublingforMontanaCommunitiesandFamiliesBoththeMontanaSenateandHousehavecommitteesdedicatedtoreviewing,changing,andvotingonHouseBill2andotherappropriationsbillsbeforethebillsgotothefloorsoftheirrespectivechambers.ThosecommitteesaretheSenateFinanceandClaimsCommitteeandtheHouseAppropriationsCommittee.Atthebeginningofeachsession,budgetsubcommitteeswithrepresentativesofbothcommitteesareformedtolookcloselyateachofthemainareasofthebudgetandmakepreliminarydecisionsaboutwhatshouldbeadded,cut,ormovedfromthegovernor’sproposedbudget.6Thisyear,majorityleadershipdirectedeachofthesubcommitteestobothacceptthegovernor’sproposedreductionsandmakefurtherreductionsofover$40millioningeneralfundcutsinthefirstsetofmotionstakenonthebudget.7Thesecutsincludedreductionstonearlyallagencies,includinganadditional2%“vacancysavings.”8Inthebudgetingprocess,electedofficialsandtheiranalyststendtopayparticularattentiontothestategeneralfund.Thegeneralfundisthestate’sprimaryandmostflexiblefundingsource,anditisthefundforwhichbothstructuralbalanceandadequateendingfundbalancesaretargetedbygovernorsandlegislatorsalike.Targetsforstartingpointsbythejointappropriationsubcommitteeswerefocusedentirelyongeneralfundandstatespecialrevenuespending,butintheDepartmentofPublicHealthandHumanServices(DPHHS)andDepartmentofTransportation(DOT)budgets,theeffectsofthosecutsaremagnifiedbyevenlargerlossesoffederalmatchingfunds.Acrossallagencies,additionallegislativereductionsingeneralfundresultinover$102millionintotalfundingcutsbeyondwhatwasproposedintheexecutivebudget.Intotal,theearlymotionsadoptedbythejointappropriationsubcommitteeshaveresultedinastartingpointforHouseBill2thatisover$449millionbelowthe2017basebudgetintotalfunds,includingover$114millioningeneralfundsand$254millioninfederalfunds.9SeeAppendixBforapreliminaryanalysisofthecutstakenbythejointappropriationsubcommittees.10Theseearlycutsinclude:

• Over$93millioninreductionstoDPHHS,withthelargestportionofthosereductionsoccurringintheSeniorandLongTermCareDivision,whichadministersMedicaidbenefitsandotherservicestoseniorsandpeoplewithdisabilitieswhoneedassistancestayingintheirownhomeorresideinanursinghome.

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• Over$23millionincutstoMontana’scollegeanduniversitysystem,includingreductions

tostatesupportofcommunitycollegesbyover$2millionandtoUMandMSUschoolsbyover$16million.11RepresentativesoftheOfficeoftheCommissionerofHigherEducationhaveindicatedthatifthecutstostatesupportremaininthebudget,studentscouldface“double-digit”tuitionrateincreasesaswellascutstouniversityprogramsandstudentservices.12

• Alossof$193millioninfederalfundsbecauseofinsufficientfundinginthestatespecial

revenueaccountthatfundsDepartmentofTransportationprojectseligibleforsignificantfederalmatchingdollars.13Thisfundingisusedtosupportconstructionandmaintenanceofroads,highways,andbridges,theMontanaHighwayPatrol,andotherprogramswithintheDepartmentsofJusticeandFishWildlifeandParks.Oneoptionforrestoringthefederalfundingistoincreasethegastaxthatfundsthehighwaystatespecialrevenueaccountusedtomatchthefederaldollarsavailable.Suchanincreasewasnotproposedintheexecutivebudgetbutisbeingdiscussedandconsidered.14

• $3.4millionincutstotheDepartmentofCorrections.Althoughthelegislaturehasnot

specifiedwherethosecutswouldbetaken,representativesofthestateagencyhavesuggestedthattheymayjeopardizestaffandcommunitysafety.15

• Over$22millioninreductionstostatesupportforlocalK-12schoolsthroughoutthestate

comparedtowhatwouldhavebeenprovidedundercurrentMontanalawsthatdictatehowmucheducationfundingshouldincreaseeachyear.16

Legislatorsonthebudgetsubcommitteesthatadoptedthesestartingmotionshavesuggestedthatadditionalchangeswillbemadeandthatsomefundingmaybeaddedbackintothebudgetbeforethelegislativesessionends.17However,thelegislaturecannotrestorecutsandrebuildtheendingfundbalancewithoutfindingadditionalrevenue,eitherthroughthegovernor’sproposedrevenueraisers,alternativeproposals,and/orbyadoptingnewrevenueprojectionswithhigherestimates.Anynewspendingorcontinuationofprioritiespreviouslyfundedasone-time-onlyappropriationswouldalsorequirecorrespondingcutsorincreasedrevenue.One-Time-OnlyFundingfromThisBienniumIsNotIncludedintheBaseBudgetInthebudgetcreationprocess,mostappropriationsaredesignatedasongoingexpenditures,meaningthatthelegislatureandexecutiveassumetheywillcontinuetobefundedbeyondthenextbiennium.Thoseongoingappropriationsareusedtocreatethenextbasebudget.Thepreliminaryreductionsdiscussedabovearecutstothatbasebudget.However,thelegislatureandexecutivesometimesfundadditionalprogramsandservicesasone-time-only(OTO)expenditures.18Inthecurrent2017biennialbudget,approximately$69millionofgeneralfundexpendituresweredesignatedasone-time-only.19Theprogramssupportedby

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thoseOTOappropriationsarenotincludedinthebasebudgetandthusarenotincludedinthesummaryofreductionsprovidedabove.However,failuretorestoretheOTOfundingwilllikelybeexperiencedascutstothepeopleandconstituenciescurrentlybenefitingfromthoseprograms.ExamplesofprogramsandservicesthatarefundedpartiallyorentirelybyOTOfundinginclude20:

• IndianCountryEconomicDevelopment• NativeAmericanLanguagePreservation• PrimaryBusinessSectorTraining• ChildCareBestBeginningsSTARStoQualityProgram• IndianCountrySuicidePrevention• MontanaDigitalAcademy• Governor’sBestandBrightestScholarships• QualityEducatorsLoanForgiveness• MontanaResearchandEconomicDevelopmentInitiative• AquaticInvasiveSpeciesProgram

SomeoftheOTOexpendituresareincludedinthegovernor’sproposedbudgetasnewproposals.Thosenewproposalswouldneedtobeadoptedbythelegislatureinordertobeincludedinthe2019budget.Ingeneral,anycontinuationofOTOfundingwouldneedtobefundedwithacorrespondingcutinanotherareaofthebudgetortheadoptionofnewrevenue.PresentLawAdjustmentsWillAffectAgenciesDifferentlyWithfewexceptions,thejointappropriationssubcommitteeshavenotyetadoptedpresentlawadjustmentsincludedinthegovernor’sbudget.Presentlawadjustmentsarethefundingchangesneeded“underpresentlawtoallowmaintenanceofoperationsandservicesatthelevelauthorizedbythepreviouslegislature.”21Somepresentlawadjustmentsarestatutorilyrequiredincreasesbasedonfundingformulasandinflationaryordeflationaryadjustments.Asaresult,theeffectsofpresentlawadjustmentsvarywidelyinthegovernor’sproposedbudgetand,ifadopted,willeitherincreaseorfurtherdecreasethefundingcomparedtothebasebudget.Forexample,withinthebudgetfortheOfficeofPublicInstruction(OPI),presentlawadjustmentsforlocalassistancetoK-12schoolsrepresentsanincreaseofapproximately$73millionintotalfunds.22Evenfactoringinthereductionswithinthestartingpointmotions,theOPIbudgetwouldincreasebyapproximately$49million.Otherstateagenciesarefacingpresentlawadjustmentsthatrepresentreductionsfromtheamountappropriatedin2017biennium.Forexample,agenciessuchastheDepartmentofCommerceandDepartmentofLabor&Industryareexperiencingnegativepresentlawadjustments.23WhiletheDepartmentofPublicHealthandHumanServicesseesanoverallnetpositivewithinitspresentlawadjustments,somedivisionswithintheagencyarefacingreductions.Forexample,thepresentlawadjustmentstotheSeniorandLong-TermCareDivisionofDPHHSwouldfurtherreducethatbudgetbyapproximately$26millionintotalfunds.Ifactedupon,thisadjustmentwouldcomeinontopoftheover$52millionincutsalreadytakeninthe

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startingpointmotionadoptedbytheJointSubcommitteeforHealthandHumanServicesAppropriations.24EarlyCutsDemonstrateNeedforaBalancedApproachthatIncludesRevenueTheearlycutstothepublicprogramsthathelpmakeourcommunitiessafe,healthy,andeducatedareasunnecessaryastheyaredamaging.Thesecutswillhavepotentiallydevastatingimpactsonstudents,vulnerableMontanans,andcommunitiesacrossthestate.Ourelectedleadershaveotherchoicesavailable,includingpassinganumberofsensiblebillsthatwouldincreasestaterevenuesbyclosingtaxloopholesandmakingsurethatalltaxpayerspaytheirfairshare.Buildinglong-termandwidelysharedprosperityinourcommunities,providingadequateservicesforMontana’sseniorsandpeoplewithdisabilities,andensuringopportunityforallMontana’sstudents,willrequireawillingnesstoentertainabalancedapproachtothestate’scurrentrevenuechallenges.1MattVolz.“APExplains:WhyBudgetTopsMontanaLegislature’sAgenda.”DailyInterlake.January6,2017.http://www.dailyinterlake.com/article/20170106/AP/301069909.2MontanaLegislativeFiscalDivision,Vol.1StatewidePerspectives,“LegislativeBudgetAnalysis:2019Biennium,”p.3.3Seegenerally,LegislativeFiscalDivision.“LegislativeBudgetAnalysis:2019BienniumBudget”January2017.http://leg.mt.gov/content/Publications/fiscal/Budget-Books/2019/fiscal-publications.asp.4ThebudgetincludesHouseBill2(HB2)thatistheprimarylegislativevehicleforpassingthetwo-yearbudget.Thebudgetalsoincludessmallerbudgetbills,including“catanddog”bills,whichincludeappropriationsbycreatingoramendingaprograminstatelaw.Unlessnotedseparately,allestimatesarefromLegislativeFiscalDivision.“LegislativeBudgetAnalysis:2019BienniumBudget”January2017.http://leg.mt.gov/content/Publications/fiscal/Budget-Books/2019/fiscal-publications.asp.5FormoreinformationonthecreationofastateEITC,see:MontanaBudgetandPolicyCenter.“InvestinginMontana’sWorkingFamilies:AMontanaEarnedIncomeTaxCredit.”September2016.http://www.montanabudget.org/2016_eitc/.6Foralistofthesubcommitteesandtheirschedules,gototheLegislativeFiscalDivisionwebsiteandscrolldownto“JointAppropriationsSubcommitteeSchedules.”http://leg.mt.gov/css/fiscal/reports/2017-Session.asp.7MemofromSen.LlewJonesandRep.NancyBalancetoHB2SubcommitteeChairs.65thLegislature.December20,2016.http://leg.mt.gov/content/Publications/fiscal/2017Session/Committee-chairs-memo.pdf.84%vacancysavingsarealreadyassumedintheexecutiveproposedbudget.MontanaLegislativeFiscalDivision,Vol.1StatewidePerspectives,“LegislativeBudgetAnalysis:2019Biennium,”p.54.9Approximately$193millionofthelostfederalfundsaretheresultofaninsufficientfundbalanceintheHighwayStateSpecialRevenueAccount.Thedownwardadjustmentofthatstatespecialrevenueaccountmakesup$42.8millionofthespecialrevenuereductionsrepresentedinthegovernor’sproposedbudget.Theremainingreductioninfederalmatchingfunds,approximately$24.5million,comesentirelyfromtheDepartmentofPublicHealthandHumanServices(DPHHS)budget.10MBPCcalculationsinAppendixBarebasedonstartingpointmotionsummariesproducedbytheLegislativeFiscalDivisionstaffforeachappropriationssubcommittee,onfilewithMBPC.Thedataandcalculationsarepreliminaryandmaychangeaslegislativestaffcorrectsoradjuststheunderlyingdata.11ThisestimatedoesnotreflectamodificationtothestartingpointmotiontakenbytheSubcommitteeonJanuary24,2017,whichmadetwoadjustments.DP-50reductiontoProgram09(appropriationdistributiontoMUSunits)wasfurtherreducedby$1,903,274ingeneralfund,andtheDP-50reductiontoProgram10(researchanddevelopmentagencies)wasfurtherreducedby$24,894ingeneralfund.LegislativeFiscalDivision.“MotionOCHE–2A.”January24,2017.OnfilewithMBPC.12CharlesJohnson.“Legislativesubcommitteesbegincuttingmillionstoeducationandcorrections.”BozemanDailyChronicle.January11,2017.http://www.bozemandailychronicle.com/news/mtleg/legislative-subcommittees-begin-cutting-millions-to-education-and-corrections/article_d832a7e2-2b28-59a5-bcd2-9fb8fc5bb669.html.13AccordingtotheLegislativeFiscalDivision,“Forthepastfiveyears,expendituresintherestrictedhighwaystatespecialrevenueaccount(HSRA)haveexceededtherevenueflowingintothefund.Asaresult,thefundbalanceinHSRAhasdeclinedtoapointwhereMDTisexperiencingseriouscashflowissues….HSRAcannotcontinuetosupporttheongoingcosts,currentservicelevels,maintenanceofeffortneededtoretainthestate’sfavorablefederalmatchrate,andthematchtofederalconstructionwithoutchanges.”LegislativeFiscalDivision.“Volume5:SectionC-NaturalResourceandTransportation.”LegislativeBudgetAnalysis:2019Biennium.November2016.http://leg.mt.gov/content/Publications/fiscal/Budget-Books/2019/Budget-Analysis/section_c/00-Entire-Sec-C.pdf.14JonathonAmbarian.“Montanahighwayprojectsmoveforwardafter$10Mloan.”MTNNews.January13,2017.http://www.kxlh.com/story/34255900/montana-highway-projects-move-forward-after-10m-loan.

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15CharlesJohnson.“Legislativesubcommitteesbegincuttingmillionstoeducationandcorrections.”BozemanDailyChronicle.January11,2017.http://www.bozemandailychronicle.com/news/mtleg/legislative-subcommittees-begin-cutting-millions-to-education-and-corrections/article_d832a7e2-2b28-59a5-bcd2-9fb8fc5bb669.html.16See“PresentLawAdjustmentsWillAffectAgenciesDifferently,”below.17MattVolz.“LawmakersproposeslashingMontanahealthdepartmentbudgetby$93M.”GreatFallsTribune.January11,2017.http://www.greatfallstribune.com/story/news/politics/2017/01/11/lawmakers-propose-slashing-montana-health-department-budget/96459494/.18Theone-time-onlydesignationissometimesmadebecausethelegislaturewantstoreceiveupdatesandreportsbeforedecidingwhethertocontinuefunding.Sometimesthedesignationismadeinordertoachievestructuralbalanceinthebudget,sothatongoingexpendituresdonotexceedongoingrevenue.19LegislativeFiscalDivision.“LegislativeFiscalReport2017Biennium:Volume1,StatewidePerspectives.”June2015.http://leg.mt.gov/content/Publications/fiscal/Budget-Books/2017/Fiscal-Report/Volume-1/4.pdf.The$69milliondoesnotincludethefundingforOPDandLivestock,agencieswhoseentirebudgetsweredesignatedasOTOinthe2017biennialbudget.20LegislativeFiscalDivision.“LegislativeFiscalReport2017Biennium:Volume1,StatewidePerspectives.”June2015.http://leg.mt.gov/content/Publications/fiscal/Budget-Books/2017/Fiscal-Report/Volume-1/4.pdf.21LegislativeFiscalDivision.“UnderstandingStateFinancesandtheBudgetingProcess.”2017LegislativeSession.http://leg.mt.gov/content/Publications/fiscal/leg_reference/Brochures/understanding-state-finances.pdf.22LegislativeFiscalDivision.“OfficeofPublicInstruction:AnAgencyProfilePreparedbytheLegislativeFiscalDivision.”November2016.http://leg.mt.gov/content/Publications/fiscal/Budget-Books/2019/Budget-Analysis/section_e/00-Entire-Sec-E.pdf.23LegislativeFiscalDivision.“GeneralGovernment:AnAgencyProfilePreparedbytheLegislativeFiscalDivision.”November2016.http://leg.mt.gov/content/Publications/fiscal/Budget-Books/2019/Budget-Analysis/section_a/00-Entire-Sec-A.pdf.24LegislativeFiscalDivision.“TheDepartmentofPublicHealthandHumanServices:AnAgencyProfilePreparedbytheLegislativeFiscalDivision.”November201.6http://leg.mt.gov/content/Publications/fiscal/Budget-Books/2019/Budget-Analysis/section_b/00-Entire-Sec-B.pdf.Inthejointappropriationsubcommitteehearing,DPHHShasclaimedthatthepresentlawadjustmenttakentotheSLTCbudgetreflectsthatservicesprovidedinthatdivisionareunder-utilizedundercurrentlaw.

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GlossaryofTerms*Basebudget–Thelevelofongoingappropriationsfromthemostrecentfiscalyearfromwhichtheexecutiveandlegislaturemakeupwardordownwardadjustmentsinbuildingthenextbiennium’sbudget.Biennium–Atwo-yearperiod.Forthestatebudget,thisperiodbeginsJuly1oftheodd-numberedyearsandendsJune30ofthefollowingodd-numberedyear.Bienniumbudget–Thetotalamountofappropriationsforatwo-yearperiod,includingone-timeonlyappropriations.Budget–Thetotalamountofappropriationsforagivenyear,includingone-timeonlyappropriations.Catanddogbills–One-timeoron-goingappropriationsmadeinbillsotherthantheGeneralAppropriationsAct(HB2).Decisionpackage(alsocalledachangepackage)–Separate,specificadjustmentstothebasebudget.Changepackagescanbeeitherpresentlawadjustmentsornewproposals.Endingfundbalance–TheamountoffundsremainingintheMontanabudgetaftertheendofafiscalyearorbiennialbudget.Montanaisoneofonlyfourstatesinthecountrythatdoesnothaveaseparate“rainydayfund”toprotectagainstrecessionsorotherunforeseenevents.Instead,Montanareliesonthebudget’sendingfundbalancetohelpthestatethroughfiscallytoughtimesoremergencies.Executivebudget–TheproposedbudgetdevelopedbytheGovernorfortheupcomingfiscalbiennium.Federalspecialrevenue–Accountsdepositedinthestatetreasuryfromfederalsources,tobeusedfortheoperationofstategovernment.Fiscalyear(FY)orstatefiscalyear(SFY)–A12-monthaccountingperiodbeginningJuly1andendingJune30.FY2017referstothefiscalyearendingJune30,2017.(Note:Thefederalfiscalyear(FFY)isOctober1throughSeptember30.Generalfund–Accountsforallgovernmentalfinancialresourcesexceptthosethatmustbeaccountedforinanotherfund.HB2–TheGeneralAppropriationsActinwhichthelegislatureauthorizethefundingfortheoperationofstategovernmentfortheupcomingbiennium.Eachsession,HouseBill2isreservedforthispurpose.

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Newproposals–Requests(changepackagesordecisionpackages)toprovidenewnon-mandatedservices,tochangeprogramservices,toeliminateexistingservices,ortochangethesourceoffunds.Non-budgetedtransfer–FundsmovedfromoneaccounttoanotherinthestateaccountingsystembaseduponstatutoryauthoritybutnotbyappropriationintheGeneralAppropriationsAct(HB2).Payplan–Provisionbythelegislatureofageneraladjustmenttosalariesand/orbenefitspaidtostateemployees.Alsoreferstothepayschedulelistingthestatesalaryrateforeachclassifiedpositionaccordingtothatposition’sgradeandthemarketrate.Presentlaw–Theadditionalorreducedleveloffundingneededunderthepresentlawtomaintainongoingoperationsandservicesatthelevelauthorizedbythepreviouslegislature.Presentlawadjustments–Requests(changepackagesordecisionpackages)foranadjustmentinfundingsufficienttoallowmaintenanceofoperationsandservicesatthelevelauthorizedbythepreviouslegislature(e.g.,caseload,enrollmentchanges,andlegallymandatedworkload).ProprietaryFunds–Fundsthataccountforoperationsfinancedandoperatedinamannersimilartoprivatebusiness(enterprisefunds)orprovidedbyonedepartment/agencytoanotherdepartment/agency(internalservicefunds).StateSpecialRevenue–Accountsformoneyfromstateandothernonfederalsourcesthatisearmarkedforaparticularpurpose,aswellasmoneyfromothernon-stateornonfederalsourcesthatisrestrictedbylaworbythetermsofanagreement.VacancySavings–Thedifferencebetweenwhatagenciesactuallyspendforpersonalservicesandthecostoffullyfundedpositionsfortheentireyear.Alsotheratethatmaybeestablishedbythelegislaturetoreducepersonalservicesbudgets.*Mostoftheseterms,alongwithadditionalterms,canbefoundatMontanaLegislativeFiscalDivision,“UnderstandingStateFinancesandtheBudgetProcess.”2017LegislativeSession.http://leg.mt.gov/content/Publications/fiscal/leg_reference/Brochures/understanding-state-finances.pdf.