Billions Approved, Millions Cut: Inside Montana’s 2025 Budget

A summary of the key information has been provided at the bottom of the article.

BUTTE, MT - With just days remaining before the start of the new fiscal year, Montana Governor Greg Gianforte signed into law a $16.5 billion two-year budget, finalizing most of the Legislature’s spending priorities while exercising his line-item veto power to trim more than $30 million in expenditures he deemed unnecessary.

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As reported by the Montana Standard, the newly enacted budget—centered around House Bill 2—funds the core operations of state government, including public education, health care programs, public safety, and infrastructure, using a mix of federal and state dollars.

Although the Legislature’s version closely resembles the governor’s original proposal, Gianforte has sought to distance himself from some aspects, stating in a veto letter that the final product wasn’t “as fiscally responsible as the one I proposed.”

A Budget Shaped by Ideological Divides

The 2025 legislative session saw rare alliances and deep divides.

Moderate Republicans and Democrats joined forces to pass a version of the budget largely in line with Gianforte’s early vision.

This bipartisanship sparked frustration from both ends of the political spectrum: conservative Republicans argued the budget spent too freely, while progressive Democrats believed compromises left out needed investments in the social safety net.

Despite the contention, Gianforte approved nearly all of the spending, vetoing only $31 million from HB 2 and an additional $349 million from other bills.

Key Investments in the 2025–2027 Budget for Montana

Health Care:

The state will renew its Medicaid expansion program—worth about $1 billion annually—ensuring health insurance access for low-income adults.

An additional $54 million will go toward boosting provider reimbursement rates, and behavioral health care infrastructure will see expanded investment.

Education:

Public education was another major focus, with over $100 million allocated to raise starting teacher pay and fund workforce development programs.

Montana’s tribal colleges will receive more funding for non-Native students, and community colleges will get additional support.

Public Safety and Corrections:

The budget includes pay raises for Montana Highway Patrol officers, eight new public defenders, and two new judges in Yellowstone County.

Meanwhile, $20 million annually will go toward out-of-state prison beds with CoreCivic. However, a separate $150 million capital investment will expand the state’s own prison capacity by 500 beds, aiming to reduce reliance on private facilities.

Judiciary and Legal System:

The funding also allows for improvements across Montana’s legal infrastructure, addressing ongoing caseload challenges with new judges and public defenders.

Property Tax Relief Measures

While not part of HB 2, property tax relief became one of the session’s headline topics.

Two major reform bills were passed, offering up to $400 in rebates for eligible homeowners this fall—an effort costing the state around $96.6 million.

These laws also restructure Montana’s appraisal system, requiring new staff, software, and outreach efforts.

What Was Cut?

Gianforte’s line-item vetoes targeted a number of smaller initiatives, including:

• $11 million for increased air ambulance reimbursements

• $3 million for student loan repayment incentives for state-run health care employees

• Expansions of free school lunches, STEM programs, and agriculture initiatives, each receiving less than $1 million

• $6 million from TANF funds earmarked for nonprofit-run after-school programs

The governor defended these cuts as prudent budgeting. “This budget prioritizes what is necessary over what would be nice to have,” Gianforte wrote.

Critics, including Rep. Mary Caferro (D-Helena), sharply disagreed. Caferro called the rejection of TANF-funded youth programs a missed opportunity to help struggling families, saying, “I am heartbroken today for Montana’s kids.”

Other Notable Vetoes

Gianforte also struck down:

• An additional $1.6 million increase for contracted prison rates (beyond a $2.7 million increase he already supported)

• $1.85 million for a prerelease center rate hike, calling the timing “premature”

• $29,702 intended to reimburse former Commerce Director Scott Osterman for previously repaid travel expenses—an item Gianforte said was unnecessary despite legislative support

Big Ticket Spending and Income Tax Cuts

Despite the vetoes, Gianforte’s administration wasn’t shy about approving large-scale expenditures in other areas.

He signed into law a major income tax cut bill—his top legislative priority—which is projected to reduce state revenue by $211 million by 2027.

What This Means for Montanans

In the short term, Montanans can expect investments in health care, education, and public safety to continue, along with modest property tax relief this fall.

However, budget watchdogs and fiscal conservatives warn that current spending trends may outpace revenue by 2028, citing a Legislative Fiscal Division forecast.

Even with the governor’s cuts, the state expects to end the biennium with approximately $311 million in general fund reserves, a cushion intended to protect against economic uncertainty.

As Montana enters this new fiscal period, Gianforte’s budget reflects both continuity with his earlier proposals and careful maneuvering within a politically divided Legislature. Whether the balance between spending and savings holds up in the years to come remains to be seen.

Montana Governor Greg Gianforte has signed a $16.5 billion two-year state budget, approving most of the Legislature’s spending while vetoing over $380 million in targeted cuts.

The budget funds key areas like Medicaid expansion, teacher pay raises, behavioral health infrastructure, and public safety improvements.

Property tax relief measures were also passed separately. Gianforte used his line-item veto authority to remove funding for initiatives he labeled “unnecessary,” including expanded free school lunches, student loan repayment programs, and TANF-funded after-school services.

While critics argue the cuts harm vulnerable populations, supporters say the budget balances necessary investment with fiscal restraint.