Committee to discuss public school funding

Recommendations on how to improve public school funding will get their first hearing at meetings the next three evenings in northcentral
Montana towns.

By PETER JOHNSON
Tribune Staff Writer

The suggestions are meant to address such problems as funding inequity by fine-tuning the existing system without spending a lot of
additional money, said state Sen. Don Ryan, D-Great Falls, a member of the interim legislative Committee on Education and Local
Government.

The recommendations come from a committee of state educational experts, the Public School Funding Advisory Council, which was
appointed by Gov. Judy Martz at the request of the 2001 Legislature.

Ryan and other members of the interim committee will receive their first full presentation of the governor’s council ideas this afternoon in
Shelby, and then hear what the public thinks at the three hearings.

"I think school financing is one of the most complicated and misunderstand parts of state government," said Ryan, a former Great Falls
school board trustee. "The council’s recommendations themselves are complicated and dense."

The eight one-sentence recommendations are chockfull of such inside terms as "GTB calculations," "BASE budgets" and ANB, for
"average number belonging," or, in other words, student enrollment.

"Council members tried to do as much as they thought was politically possible in their recommendations," Ryan said. "With a couple of
exceptions, they are not recommending putting more money into the budget pie, but adjusting how the pie is divided."

One problem, Ryan said, is that Montana has more than 450 school districts, each with differing budget issues due in part to how much
property tax base it has to support needed school services.

That has led to cries of taxing inequities — and even threats of lawsuits — by poorer school districts in which residents must pay more
taxes for basic schools than in other, richer districts.

In addition, many districts in Montana are facing declining student enrollment, Ryan said. The state’s school funding formula doesn’t give
such districts enough time to adjust to reduced state funding and still meet such fixed costs as utilities, salaries and maintenance.

Skyrocketing health insurance costs present another major problem, especially in school districts that have met the state’s "cap" on how
much they can tax local taxpayers. Such districts may be forced to reduce the money they spend on education in order to pay insurance
costs, Ryan said.

Four of the committee’s most important recommendations address some of those problems, he said.

They call for:

Creating a countywide levy to fund the property tax portion of the BASE budgets of all school districts in a county. The BASE budget
represents 80 percent of a school district’s budget; it comes from a combination of direct state aid and local property taxes.

Currently the property tax portion comes from within each small district itself, rather than being countywide. That can create inequities in
an area such as Rosebud County, where Colstrip residents pay relatively scanty taxes because huge power-generating plants are part of
their tax base, but neighboring Forsyth residents pay far more because the power plants are not part of their tax base.

The governor has said this recommendation "holds substantial promise" of improving taxpayer equity within counties.

Expanding the county retirement levy to pay for school district health insurance costs. The retirement levy is "permissive," which means it
is levied automatically without needing voter approval. This recommendation would allow school districts to shift those increasing costs
from their general fund, and thereby either increase direct spending on education or provide tax relief.

Martz has said she does not support this suggestion, which could lead to higher local taxes, but instead favors looking into the idea of a
statewide insurance pool for school districts to help keep costs down.

Allowing districts that are facing declining enrollments to average those enrollment figures over three years. That would result in a slower
reduction in state education funding, giving the districts more time to make adjustments.

Creating an automatic cost-of-living hike in the the different types of support money that the state provides local school districts.

The governor has said she doesn’t expect to "unconditionally support" this proposal because such an "inflator" could make it hard for the
state to meet demands for other needed services in times when state revenues are down.

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