State Revenue Report: Montana Tax Revenue Very Strong.

• Author: Johnson, Terry
• Position: MONTANA ECONOMIC REPORT

As shown in Table 1 for fiscal 2021, total general fund revenue collections were $2.96 billion, with 79% collected from income (individual and corporation) and property taxes. These revenues are used to finance a variety of state services, but a majority of these funds are used for education, human service and public safety programs.

Total general fund revenue collections increased by $430.5 million or 17% from collections received in fiscal 2020. This increase was unusually high and was attributed to income and corporate income tax collections. The sum of the changes for the remaining sources were a net increase of $21.2 million primarily caused by increased video gaming taxes.

The change in income taxes can be explained by two main factors. Because of the COVTD-19 pandemic, the calendar 2020 tax due date was extended from April 15toJune 15.This extension caused approximately $50 million in collections to be recorded as fiscal 2021 receipts instead of fiscal 2020. This means fiscal 2021 collections were overstated by $50 million and fiscal 2020 collections were understated by the same amount.

In addition to this issue, the federal stimulus payments enacted by Congress resulted in substantial payments to Montanans. The economic statistic maintained by the U.S. Bureau of Economic Analysis provides a measures of transfers payments to Montanans from the federal government. Figure 1 shows the year-over-year change in these funds since 2012. The amount of change increased by $3.1 billion from 2019 to 2020, a 29.2% increase. Since these monies are considered taxable income under Montana law, income tax collections were increased based on the tax liability of the taxpayer.

Terry Johnson is the former chief revenue forecaster for the state of Montana, retired.

Table 1. Total general fund collections, Montana. Source: Montana's Statewide Accounting, Budgeting and Human Resource System. Fiscal 2017 Fiscal 2018 Fiscal 2019 Revenue Category Collections Collections Collections Top Seven Sources...