Montana Department of Revenue - Where do taxes go?


State and Local Spending

This chart shows the percentage of state and local spending in Montana in each of eight general categories for the fiscal year ending June 30, 2010.*

 

Education, including public schools and the university system, accounted for a little more than one-third of total spending. Health and human services accounted for about one-fifth of total spending. This includes Medicaid, public health programs, and income support programs. Other categories account for smaller shares of total spending.

 

A little more than half of total state and local government spending occurs at the state level, and a little less than half at the local level

 

state-spending-chart

*In this section, information on combined state and local spending and state and local revenue from all sources is from the U.S. Census Bureau’s annual survey of state and local governments. This is the only source for combined state and local data that is collected consistently across states. For comparisons between states, it is important to use combined state and local data because taxing and spending are divided between state and local governments differently in different states. The most recent fiscal year for which the Census Bureau has compiled data is 2010. Information on Montana state and local tax collections through fiscal year 2010 is from the state accounting system and Department of Revenue records.


State and Local Taxes

The state collects a wide variety of taxes. The largest source of state tax revenue is the individual income tax. The second largest category is severance and other taxes.

 

Montana does not have a general sales tax, but selective sales taxes account for about 14 percent of state tax revenue. Statewide property taxes are earmarked for public schools and the university system. Revenue from the 95 mills levied for schools is deposited in the state general fund, where it covers about one-third of state funds transferred to school districts. Motor fuel taxes are earmarked for the highway system and a few, small, related uses.

 

Local government and school district tax collections come almost entirely from property taxes.

state-taxes-chart

To learn more about tax collection and where tax dollars go, please see our 2012-2014 Biennial Report.