Wonky Word Wednesdays: State Special Revenue

Aug 13, 2014

By MBPC Staff

We are still learning about revenue this week. As mentioned last week, there are three types of revenue – General Fund, Federal, and State Special Revenue. It is the latter that we discuss in more depth today.

Generally speaking, state special revenue funds are taxes or fees identified to go to a particular agency or program. State special revenue is different from general fund in a few ways. The first is that state special revenue funds are kept in accounts separate from the general fund. In fact, one of the guidelines for these special revenue accounts is that it not divert funds from the general fund.

The second is that, under some circumstances, these funds may not necessarily need to be appropriated by the Legislature. Unlike the general fund that requires legislative approval. Because Montana’s Legislature meets every other year, there are times when other types of funding become available - like a new federal grant – when the state needs to invest these dollars before the next session. State special revenue can also be one of the limited circumstances when funding can be invested outside of the session 

Another distinction is in the specificity of purpose of these dollars. General fund dollars come from general taxes and are used to fund a variety of programs. Special revenue comes from a specific tax or fee and is used for a clear program. There are hundreds of state special revenue accounts. Some examples are:

1. Fish, Wildlife, and Parks license fees are used to support agency operations, such as the maintenance of state parks.
2. State taxes on vehicles are used to fund highway activities, such as construction and maintenance.
3. The Montana Tobacco Settlement is used for programs related to tobacco disease prevention and for state programs that provide benefits, services, or coverage of health care needs. 
4. Montana has a table wine tax, and 31% of the proceeds from that tax are used to fund Department of Public Health and Human Services programs for treating and preventing alcoholism.

Because state special revenue accounts for 21% of Montana’s budget, it is clearly an important part of how we fund important programs in our state. 

Check back next week as we continue to dive into Montana’s budget and prepare for the 2015 Legislative Session. If you have ideas of words to cover in the future, post on our Facebook page.