Lawmakers predict surplus, governor promises spending cap

Lawmakers predicted they will have nearly $1 billion in excess revenue to work with, while the governor promised a "hard spending cap" to limit legislative spending initiatives.

Traditionally, the Legislature sets revenue expectations that dictate spending decisions. But this year, Gov. Brian Schweitzer has thrown a wrinkle into the process by saying he will kill any legislation that exceeds the spending cap.

He was set to announce details on the cap later Wednesday.

Lawmakers met Wednesday morning and agreed with staff predictions that there will be an extra $975 million available over the next two years. They decided to set aside about $150 million of it in reserves.

The rest would be available for tax rebates or cuts or to increase funding for education, corrections and other expected 2007 legislative initiatives.

The governor's office is estimating a little more available to spend, roughly $30 million, over the next two years. But it is also expected to set aside a larger amount in reserves for what is being called the "Big Sky Savings Account" to offset boom and bust cycles.

Both agree the state is seeing the highest economic growth in 30 years.