HELENA – On mostly party line votes with Republicans in favor, the Montana House on Thursday advanced three bills that let a few oil-impacted school districts keep an even larger chunk of oil and gas tax revenues — money that now goes to the state.
Supporters of the bills said the school districts, mostly in far Eastern Montana, need more money to deal with impacts of surging oil and gas development.
Some who voted for the bills said they are reluctant supporters, and that they want to keep the measures alive as part of the larger debate over school funding.
Rep. Bill McChesney of Miles City, one of two Democrats who voted for the bills, said he’s concerned that the measures are drawn too narrowly, benefiting too few school districts.
Miles City is seeing big impacts from oil development in Eastern Montana, but the bills don’t help its schools or county at all, he said.
“I rise with cautious support of these bills,” he said. “These need to be moved forward as a possible ending piece of an education bill.”
House members indicated that the three bills — House bills 176, 177 and 228 — will be sent to the House Appropriations Committee for further examination. That panel is likely to examine the bills along with other school-funding proposals in the coming weeks.
Most Democrats voted against the measures, saying the House should wait to craft a more comprehensive solution that helps the impacted school districts but is fair to schools statewide.
“There are better plans in the pipeline,” said Rep. Tom Woods, D-Bozeman. “There are better ways to do this. This bill doesn’t do enough for districts that are next to districts that are producing oil.”
Four Republicans, including Rep. Jonathan McNiven, R-Huntley, voted against all three bills.
McNiven said the 2011 Legislature closed some loopholes that had allowed a few school districts in oil-producing areas to keep huge amounts of money, and who were “working the system.” These bills reward those same districts, he said.
HB176, sponsored by Rep. David Halvorson, R-Sidney, would allow school districts with oil and gas production to keep oil and gas tax revenue up to 150 percent of their general fund budget. Currently, the limit is 130 percent, with the excess going to the state for distribution to all schools.
Only nine school districts surpassed the 130 percent limit this year — Baker, Lambert elementary and high school, Sidney High School, Savage High School, Plevna, Westby and two small elementary schools near Sidney.
HB176 was endorsed on a 58-41 vote.
HB177, also sponsored by Halvorson, gives oil and gas school districts more flexibility to move oil and gas money within their budget. It was endorsed 59-41.
HB228, sponsored by Rep. Lee Randall, R-Broadus, would allow any school district with enrollment increases of more than 5 percent to keep all of their oil and gas money. The bill would reduce the state treasury by almost $27 million the next two years and benefit only a few districts.
Randall conceded that the bill is “narrowly defined” but said he would leave the more broad-based approaches to “people smarter than myself.” The bill was endorsed 59-41.