The two top Republican leaders don't like Gov. Brian Schweitzer's plan to spend most of the money on state needs, and said more should be returned to taxpayers in the form of tax cuts.

"The reason we have a billion dollars in excess revenue is because the tax rates are too high," said incoming House Speaker Scott Sales, R-Bozeman. "I think it's real simple: It's your money and we should give it back to you."

"The easy thing is to just say, 'Give all this money back,' " countered incoming Senate President Mike Cooney, D-Helena. "This is a chance to put money into programs that we think are important."

Cooney and Sales spoke Tuesday at the annual meeting of the Montana Taxpayers Association, which primarily represents business interests on tax issues.

Also speaking were incoming Senate Minority Leader Corey Stapleton, R-Billings, and the House Democratic floor leader, Rep. Art Noonan of Butte.

The leaders offered their views of the upcoming Legislature, which convenes Jan. 3 in Helena. Democrats will have a 26-24 majority in the Senate, while Republicans will hold a 50-49 edge in the House. Constitution Party Rep. Rick Jore of Ronan, a former Republican, has said he'll vote with Republicans to pass rules giving them majority control of the body and committee assignments.

The state budget for 2008-09 has a projected surplus of nearly $1 billion, mostly due to greater-than-expected income tax revenue.

Schweitzer, a Democrat, has proposed a budget that increases general fund spending by $700 million, or 22 percent, over two years. He also is proposing $150 million in tax cuts and rebates, a year-end cushion of $100 million and a "rainy day" fund that could reach $100 million.

Stapleton said Republicans feel the 22 percent increase is "way too much," and they'll argue for broader tax relief and less government spending.

"We're going to permanently reduce property taxes," he said. "We really want to reform taxes."

Schweitzer has proposed a one-time, $400-per-household rebate to alleviate property taxes.

Sales also said while Schweitzer has bragged about balancing the current budget without raising taxes, the governor did support many fee increases, which Sales said should be scaled back.

"They put a greater burden on business," Sales said. "It's a little disingenuous to say we didn't raise taxes."

Cooney, however, said during the campaign that he heard constituents talking about public needs, such as having money to attract good teachers in public schools and fixing the financially shaky public employee retirement system.

"People expect services from government, and they expect those services to be there," he said. "And folks, those services don't come for free."

He said a good chunk of spending in the governor's budget is for "one-time" projects, and that it's wise to invest in state institutions and programs when the money is available.

Noonan said the fact that the Legislature is closely split between the political parties means Montanans want moderation - which means working together, rather than political posturing.

"We're not elected just to espouse our political philosophies," he said. "We're elected to govern. Moderation is where the people of Montana are at."

Stapleton also said while he expects some partisan political battles at the 2007 session, he doesn't think the parties are that far apart on what they want to accomplish on tax reforms and spending.

"I think we'll end up somewhere in the middle," he said.