HELENA — In Harrison, a small, rural community in southwest Montana, the new school-funding law means just $29,000 in new state aid for its school district next year — but school Superintendent Fred Hofman said don’t call that money “peanuts.”
“Without the new law, we’d be looking at a $30,000 to $40,000 decrease,” he said. “For us, that’s huge. … I hardly call 5 percent of my overall budget `peanuts.’”
Some 200 miles to the east in Billings, Montana’s largest school district will see $1.3 million of new state aid next year — proportionately smaller than the tiniest school districts, but just as welcome.
“It’s a good increase, and we appreciate it,” said Leo Hudetz, chief financial officer for Billings public schools. “It helps out with our budget issues here. We’re dealing with a lot of rising, inflationary costs like everyone else.”
That’s the beauty of the school-funding rewrite passed by the Legislature last month, school officials say: It has a little something for all districts, no matter their size or geography, providing badly needed funding boosts at the right time and place.
An analysis by the Gazette State Bureau shows that the smallest school districts will get a proportionately higher boost in state funding from Senate Bill 175, which takes effect this year. Their increase in state aid tends to be about 2 percent to 3 percent of their budget next school year.
Mid-sized and larger districts are getting new state aid equal to 1 percent to 1.3 percent of their current budgets.
But school officials say the genius of SB175 is more than just the amount of funding it provides. Rather, it’s in the way it distributes and calculates the money, in a fashion that most school districts say is fair and equitable and makes sense.
“The pure recognition of some equity in the formula, allowing us to pick up more in the basic-entitlement (payment from the state) because of our size, is meaningful,” said Pat McHugh, executive director of business operations for Missoula public schools.
Under the current system, each school district in Montana, regardless of size, gets a lump-sum payment from the state called a “basic entitlement.”
With SB175, that payment increases, based on a district’s enrollment. The law also increased the minimum basic entitlement, helping small school districts as well.
McHugh said without SB175, Missoula’s high school district budget would have been “basically flat,” with very little increase next year. Now, with the help of the new law, it will be $264,000 higher.
“It’s less than 1 percent, but it’s a big deal from an equity standpoint,” he said. “This really helps some of the larger districts.”
Hudetz said the new law also allows growing school districts like Billings to get increased state funding more quickly, in reaction to the growth.
SB175 also changes how oil-and-gas tax revenue is distributed to school districts along the Montana-North Dakota border, where a boom has fueled big growth in some schools.
Schools in Sidney have seen enrollment increase 16 percent the past two years, but its elementary district has virtually no oil-and-gas development within the district boundaries and therefore gets almost no oil-and-gas tax revenue.
Under SB175, the Sidney elementary district can get oil-and-gas revenue from neighboring districts, when those districts’ oil and gas money exceeds a maximum amount.
Sidney School Superintendent Daniel Farr said any new oil-and-gas funds that flow to his elementary district are likely to be used to expand its buildings.
“That’s our greatest concern right now — running out of space,” he said. “I’m spending $856,000 to remodel six classrooms and two bathrooms, to accommodate (our) increasing growth. If I get another 8 percent increase in enrollment next year, I’m out of space.”
He noted that SB175 also changes the law to allow oil boom districts to use more of their oil-and-gas tax revenue for things besides the school’s general fund, such as buildings, transportation or other needs.
“It’s a different game over here,” Farr said. “To rent a two-bedroom apartment in a new complex is a $2,000 deposit and $2,000 each for first and last month’s rent. I don’t have a beginning-level teacher who takes home that kind of salary.”
Another aspect of SB175 is its new “data for achievement” payments. Starting this fall, each school in Montana gets a per-student state payment to fund participation in an electronic data system to track student achievement.
Kent Kultgen, superintendent of schools in Helena, calls that element of the law “a big, big step that really helps schools.”
“Now we’ll have the tools and the finances behind (the data system) to say, 'this is important,’ to give that information to the teachers so they can make adjustments for their students,” he said.
Hofman, the superintendent in Harrison, said that while SB175 has plenty to help growing and larger school districts, it also extends a helping hand to districts like his, which are shrinking.
Harrison will graduate 10 seniors from its high school this year, and the district expects its enrollment of 95 kids to drop by one-third in the next three to four years, he said.
Without SB175, Harrison schools’ budget would drop dramatically. Now it will be a more gradual decline, Hofman said.
“It’s given us some time to figure out how to climb down, rather than being pushed off a cliff, and we don’t have to climb down as much,” he said. “We won’t have to do all the damage in one year. … At least we’ve got a year to plan.”