Tight belts for tough times

Squeezed by the recession longer than most states, Montana state government is about to go through another round of budgetary belt tightening.

But that’s what it takes for individuals and businesses to get through a recession, and state government should be no exception.

Fortunately for Montana, it is in far better financial shape than at least 47 states that are faced with deficits, some of them quite severe.

The state went into the current biennium with a healthy budget surplus in anticipation of rough economic conditions that have come to pass. The latest forecast is that Montana will be $60 million in the red by the middle of next year if action is not taken.

So Gov. Brian Schweitzer’s budget director is recommending more than $40 million in cuts, on top of $30 million that have already been identified, in order to have a balanced budget by June 2011.

Montana was one of just seven states that saw tax revenue drop by more than 10 percent in the fourth quarter of 2009, indicating that the effects of the recession have been increasingly taking hold.

Schweitzer has an optimistic outlook, saying that “everyone is agreeing that we’re approaching or have reached the bottom of the recession” and predicting that tax revenues will pick up.

True enough, many parts of the state may be coming out of the trough, but other areas are likely to have continued struggles. The Missoula area comes to mind. The full impacts of the closure of the Smurfit-Stone container plant at Frenchtown are likely to be realized throughout this year. The loss of more than 400 jobs and the associated payroll will have a ripple effect on the broader economy along with tax revenues.

In any case, the state can’t operate on the basis of hopes and wishes. Yes, we hope Schweitzer is right, but meanwhile, the responsible thing to do is budget our government the same way we budget our personal expenses: Pay the necessities first, and then prioritize what is left.