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Montana governor builds surplus by 'running government like ranch'

Montana Gov. Brian Schweitzer has given out coins made of Montana palladium worth more than $600 to people who suggest ways for the state to save money.

His favorite idea: quit printing government telephone directories.

"If you ain't smart enough to figure out how to find someone online, you probably got no information that we needed anyway," Schweitzer said in an interview.

While other governors commonly say they run their states like a business, Schweitzer, a 56-year-old Democrat, calls his management style "running government like a ranch." Montana was one of only two states to report surpluses from 2009 to 2011, according to the Center on Budget and Policy Priorities. The other was North Dakota.

Rising tax collections on individual income, corporate licenses, oil and gas production and insurance will leave $427 million to spare at the end of June 2013, according to a Dec. 5 report by the Legislative Fiscal Division, almost three times what was forecast earlier this year.

One result is that municipal bonds from Montana have returned 10.35 percent this year, second only to Wyoming, outperforming the national average of 8.63 percent, according to Barclays Capital. As for those one-ounce palladium coins donated by a local mining company, they're worth about $660 now, up from $430 in May, 2010.

Gains have come "even though the economy doesn't seem to be quite breaking out," according to Patrick Barkey, director of the Bureau of Business and Economic Research at the University of Montana in Missoula.

"We're not a boom state like North Dakota. There have been decent earnings and employment growth in mining."

The state ranked 18th in the U.S. in employment growth and 25th in income growth for the 12 months ended in September, according to the Bloomberg Economic Evaluation of States index.

When it comes to the surplus, Don Cowles, president of Wild West Shirt Co. of Bozeman, says Montana lawmakers deserve more credit than the governor. It was the Legislature that opposed Schweitzer's proposal to give state employees a 4 percent raise over two years, for instance, he said.

"The reason the budget has a surplus is the Legislature put a lid on spending," Cowles said. "They didn't approve a pay increase for employees. They didn't give the universities the money they asked for. They really held back on their spending."

Schweitzer, who has one year left in his second and final term, has turned his budget scythe to what has become, according to the National Governors Association, the largest expenditure among states: health care.

Bloomberg News Photo

Montana Democratic Gov. Brian Schweitzer has used a branding iron to burn the word "veto" on bills he rejects.