[Attorney General’s language restored by Montana Supreme Court
order dated August 7, 2006.]



The Montana Constitution currently prohibits appropriations by the legislature that exceed anticipated revenue. This measure adds a constitutional spending limit that would prohibit increases in appropriations greater than the combined growth rate of population and inflation. It allows appropriations up to the largest spending limit for any previous biennium. Emergencies, debt payments, pro-rata tax rebates, various appropriations expressly provided by the Montana Constitution, and expenditures from funding sources including the federal government, constitutionally created trusts, and certain user fees are not included in the spending limit.  The legislature may exceed the spending limit only with voter approval.

This measure may require reduced future expenditures in several areas of government services where caseloads historically have grown at a rate exceeding combined growth in population and inflation, such as correctional population and Medicaid recipients, or may require reduced future expenditures in other areas to offset those increasing caseload costs.

[ ]  FOR limiting the increase in appropriations to the combined growth rate of population and inflation, or the largest spending limit for any previous   biennium.

[ ]   AGAINST limiting the increase in appropriations to the combined growth rate of population and inflation, or the largest spending limit for any previous biennium.



Section 1. Article VIII, section 9, of theConstitution of the State of Montana is amended to read:

Article VIII, section 9. Balanced budget andspending limit. (1) Appropriations by the legislature shall notexceed anticipated revenue and are subject to a state spending limitprohibiting appropriations for a biennium of a total amount of money that ismore than the greater of the two following amounts:

(a) the “state spending limit” which shall be the sum of the total amountof legislative appropriations for the immediately preceding biennium and theproduct of that total amount of appropriations multiplied by the sum of thepercentage change in inflation plus the percentage change in state population;or

(b)The largest state spending limit as calculated under subsection (1)(a)for any previous biennium.

(2) For thepurposes of this section “inflation” means the change for the most recentlypublished two-year period preceding the commencement of a biennial legislativesession, expressed as a percentage in the consumer price index for all urbanconsumers, west region, all items as calculated by the Bureau of LaborStatistics of the United States Department of Labor, or as calculated in asuccessor index.

(3) For purposesof this section, state population shall be determined by the most recentlypublished annual federal census estimates for Montana representing the nearesttwo-year period preceding the commencement of a biennial legislative session,and such number shall be adjusted every decade to match the results of federalcensus for Montana.

(4) If thelegislature transfers the responsibility for providing a government servicepreviously provided by the state to local or tribal governments, the statespending limit as calculated pursuant to subsection (1) shall be reducedaccordingly in an amount that reflects the actual cost reduction to the state,or in the cases where costs for the responsibility were shared the reductionamount shall reflect the state’s share.

(5) Thelegislature may only attain the authority to appropriate in excess of the statespending limit with approval by a vote of the people submitted in accordancewith Article III, section 5. Accordingly, a ballot question may be presented tovoters for the approval or rejection of an authority to exceed the state spendinglimit by a specified amount, but may not be presented in a form requestingvoter approval or rejection of a specific appropriation or appropriations.

(6) For thepurposes of this section, “the total amount of legislative appropriations”shall include all legislative appropriations except the following categories:

 (a) moneysdesignated by the legislature for a reserve fund to be used as safeguardagainst shortfalls in state revenue below the state spending limit. Thetransfer of money between the reserve fund and the state treasury is not anappropriation for purposes of calculating the state spending limit; however,any moneys that are held in such a fund which are later appropriated from thestate treasury or appropriated directly from the reserve fund must be includedwithin the total amount of legislative appropriations unless otherwise exemptunder this subsection (6);

(b) appropriations for emergencies as may bedefined by law and threats to the continuity of government if appropriated:

(i) pursuant to Article III, section 2, forthepurposes of legislative actions to ensure continuity of government duringperiods of emergency or enemy attack;

(ii) by vote of three-fourths (3/4) of themembers of each house of the legislature if the appropriation is for a matterthat meets the definition of an emergency pursuant to law and is notanticipated to be an ongoing expense and is not intended to fund ordinaryoperations of government;

(iii) pursuant to law, by a majority vote, ofeach house of the legislature in an amount that does not exceed $16 million,adjusted for inflation and population growth in a manner similar to section 1,subsection (1) as of the effective date of [this amendment]; or

(iv) pursuant to ArticleVI, section 13, where the governor calls out the militia to aid in theexecution of laws, suppress insurrection, repel invasion, or protect life andproperty in natural disasters.

(c) appropriationsof bond proceeds or other funds derived from borrowing if payment of principaland interest on such borrowing is applied to the state spending limit orotherwise excluded under subsection 6(d);

(d) payment ofprincipal and interest on state general obligation bonds, bonded indebtednessor other long-term debt issued or incurred prior to January 1, 2007, and on anystate general obligation bonds issued after January 1, 2007, if such bonds arealso approved by voters;

(e) appropriations of moneys received from the federalgovernment;

            (f) appropriationsof moneys voluntarily donated to the state or a state agency;

(g) appropriationsof the proceeds from the sale of property at full market value tonon-governmental entities;

(h) moneyappropriated for pro-rata tax rebates;

(i) moneyappropriated for refunds of user charges or fees, and appropriations funded byuser charges or fees to the extent that such charges or fees reasonably reflectthe actual cost to the state of providing such goods or services and thepurchase by the user is discretionary and not a requirement to operate abusiness, seek employment in a trade or practice in a profession;

(j) appropriations from anyconstitutionally created trust that are necessary to the administration of suchtrust, including appropriations of moneys that are income earned on assets inpermanent endowment funds, trust funds, deferred compensation funds or pensionfunds that are credited to those funds and expended to meet the obligations ofthe funds pursuant to the constitutional provision creating the fund, includingadministrative expenses to operate any such funds, which include, but are notlimited to appropriations made pursuant to:

(i) the public school fund pursuant toArticle X;

(ii) the public retirement system pursuant toArticle VIII, section 15;

(iii) the resource indemnity trust pursuantto Article IX, section 2 for the reclamation of lands disturbed by the takingof natural resources;

(iv) the principal and interest from the coalseverance trust fund pursuant to Article IX, section 5;

(v) the noxious weed management trust fundpursuant to Article IX, section 6; or

(vi) the tobaccosettlement trust fund pursuant to Article XII, section 4;

(k) appropriationsof highway revenues pursuant to Article VIII, section 6;

(l) appropriationsmade by the legislature in fulfillment of obligations to provide foridentification, acquisition, restoration, enhancement, preservation, andadministration of cultural resources pursuant to Article IX, section 4;

(m) appropriationsfor special sessions of the legislature made pursuant to Article V, section 6,or Article VI, section 11;

(n) appropriationsfor districting and apportionment made pursuant to Article V, section 14;

(o)appropriations of special levies on livestock and on agricultural commoditiesfor disease control and indemnification, predator control, and livestock andcommodity inspection, protection, research, and promotion made pursuant toArticle XII, section 1(2);

(p)appropriations made by the legislature in fulfillment of the constitutionalobligation to fund an officer of consumer counsel so that consumer interestsare represented before the public service commission or successor agency,pursuant to Article XIII, section 2; and

(q) appropriationsfor a constitutional convention made pursuant to Article IX, section 5.

                        (7) If a courtof competent jurisdiction in a final order shall adjudge any spending category,or revenue source, exempt from [this amendment], the process of computing thestate spending limit shall be adjusted accordingly and the remaining provisionsshall be in full force and effect.

                        (8) Anyperson residing in Montana or doing business in Montanahas standing to enforce these provisions and, if successful, shall be awardedlegal costs and reasonable attorney fees.

                        (9) It isthe intent of the voters in passing [this amendment] that interpretations whichbetter restrain growth in government spending are favored over interpretationswhich do not restrain such spending.

NEW SECTION. Section 2. Saving clause. Thisamendment does not affect rights and duties that matured, penalties that wereincurred, or proceedings that were begun before [the effective date of thisamendment].

NEW SECTION. Section 3. Severability. If apart of this amendment is invalid, all valid parts that are severable from theinvalid part remain in effect. If part of this amendment is invalid in one ormore of its applications, the part remains in effect in all valid applicationsthat are severable from the invalid applications.

NEW SECTION. Section 4. Applicability. Thisamendment applies to legislative proceedings begun after [the effective date ofthis amendment], and applies to the legislative session commencing in 2007,using the biennial budget adopted in 2005 as the immediate preceding bienniumplus and including appropriations from the December, 2005 special session ofthe legislature.

NEW SECTION. Section 5. Effective date. Thisamendment is effective upon approval by the electorate.

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