News Release
Governor Addresses Special Legislative Session
Highlights National Budget Woes and Tax Proposals
8/5/2002
Mary Schwarz
406-444-5523
mschwarz@state.mt.us
(Helena) - Governor Martz today addressed state legislators to open the 28th Special Session of the Montana Legislature, emphasizing that other states are facing similar budget challenges, and discussing pending tax increase proposals.
"The last time we were together, in the spring of 2001, the budget was in structural imbalance," Governor Martz told gathered legislators. "But in 2001, an economy already in recession took another severe hit when terrorists attacked our nation on September 11. The economic recession affects government as surely as it affects businesses and individuals. The net effect has been a decline in state revenues."
Governor Martz noted that Montana is not the only state facing budget issues.
"We are not alone in this dilemma. On average across this country, state tax revenue has dropped eight percent from comparable months of 2001, and personal income tax payments plummeted a full twenty-six percent," said Governor Martz. "According to the National Conference of State Legislatures, across the nation, state budget deficits are at $58 billion, and nearly every state is reporting budget gaps."
Governor Martz also reiterated to the 150 legislators that she does not believe that tax increases work to cover budget shortfalls in a declining economy.
"Our state is already 46th in per capita income. I do not believe that increasing taxes on Montanans is the way to re-align our budgets. I will, of course, give due consideration to all proposals that you bring forward," said Governor Martz. "Businesses and families must operate within their means, and I commit to the people of Montana that our government will do the same."
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(see attached speech text)
Special Session Remarks
Speaking Points - Governor Judy Martz
August 5, 2002 - 9:15 a.m.
Speaking Time: 5 Minutes
***Check Against Delivery***
Mr. President/ Mr. Speaker, members of the House/Senate - good morning. Please accept my sincere gratitude for your dedication and public service, especially under these incredibly challenging circumstances.
This is the 28th special session in our state's history. In 1921, the 17th Special Session of our state's legislature was convened by then-Governor Dixon for the very same purpose.
In his opening remarks, he said, "The proclamation calling you into special session was issued by me with reluctance. But a knowledge of the critical condition of the state treasury ... coupled with the belief on my part that a fuller appreciation of the situation by you might lead to immediate action in bringing legislative relief ... determined my action."
I echo Governor Dixon's comments today. These are difficult times, and difficult times call for strong leadership and cooperation.
As we begin today, I want to reiterate the focus of my call for this session.
The last time we were together, in the spring of 2001, the budget was in structural imbalance. This is nothing new. For many years, our state has been run in a structurally imbalanced manner, counting on increasing revenues to compensate for increases in expenditures.
And in the past, they have. But in 2001, an economy already in recession took another severe hit when terrorists attacked our nation on September 11. The economic recession affects government as surely as it affects businesses and individuals. The net effect has been a decline in state revenues.
We are not alone in this dilemma. On average across this country, state tax revenue has dropped eight percent from comparable months of 2001, and personal income tax payments plummeted a full twenty-six percent.
States like Connecticut, Illinois, and Massachusetts are facing budget deficits of one to two billion dollars each. Idaho's legislature has reduced state spending by one hundred ten million dollars. According to the National Conference of State Legislatures, across the nation, state budget deficits are at $58 BILLION, and nearly every state is reporting budget gaps.
Here at home, as income and corporate tax returns have come in throughout the spring, we have seen a trend toward increased refund amounts and lower tax payments. This indicates a loss in income for both individuals and corporations in our state.
Based on current projections, we have fallen well short of the revenues projected when you left the session last year. As you know, this legislative body gave the Governor's Office the statutory obligation to reduce budgets in order to keep the state's budget in balance.
Given the level of reductions that we faced to address those revenue shortfalls, my budget office recommended, and I concurred, that there was no way that our administration could recommend the level of reduction in spending needed while remaining within the statutory parameters outlined.
It was based on that information that I called you for this special session. The budget office has extensively researched all available options, and has provided those recommendations to you as a base for your deliberations.
You know as well as I that these are painful decisions that affect everyone's lives. I ask that you focus on reductions in spending that have the most limited impact possible while at the same time assuring that the state remains fiscally responsible.
Our state is already 46th in per capita income. I do not believe that increasing taxes on Montanans is the way to re-align our budgets. I will, of course, give due consideration to all proposals that you bring forward.
Businesses and families must operate within their means, and I commit to the people of Montana that our government will do the same.
One final note - as you move forward in this session, it is my sincere hope and belief that we will serve Montanans best by putting aside partisan politics for the common good of our state. Our people expect more from us than name-calling and finger pointing; they expect and deserve solutions.
I hope - I trust - that you will see fit to do the right thing for the future of our state and its families. Thank you again for your service, and may God bless and guide your deliberations.
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