HELENA — As the Legislature's regular session enters its home stretch, nearly $1.5 billion in public school funding is a key part of the budget fight.

State money for schools affects not only school districts but also local property-tax payers. Taxes on oil-and-gas production and other natural resources also figure in the mix.

Here's a primer on this complicated mix of taxes, funding and formulas, and how it might affect your district and your taxes:

How do state funds finance public schools?

Nearly half of the money for public schools comes from the state treasury, which uses state income taxes, property taxes and other revenue to cover the cost. The state distributes "base aid" to school districts, on a per-school and per-student basis, in amounts set by the Legislature.

Where does the rest of the money come from?

About 40 percent is from local property taxes; another 10 percent is federal money.

Does state funding affect local property taxes?

Yes. If the state gives schools less money, school districts can ask local voters to vote for an increase in property taxes to maintain the budget at the previous year's level. An increase in state funding also can give certain districts authority to levy additional taxes, within a range of allowed budget authority.

The current proposal would increase state funding by 1 percent this year and 2.4 percent next year.

So schools are getting more state money?

Not exactly. The first year, because the 1 percent is figured on a base that is lower than current money, schools will get less money. In 2012, they will get a bit more.

How much state money goes to schools under the current proposal?

About $1.47 billion over the next two years, or 40 percent of the state's general fund budget.

How does oil-and-gas revenue go to schools?

About 52 percent of oil and gas production taxes flow to the state, and school districts where production occurs get a portion of the remainder. About 130 school districts get oil-and-gas revenue.

What about other mineral and natural-resource income for schools?

A portion of the metalliferous mines license tax goes to school districts where the mining occurs, as does a portion of the gross proceeds tax on coal production. Recipients of coal money include schools in Colstrip, Forsyth, Decker, Hardin Roundup and Spring Creek. Receipts from federal timber sales also are used to offset local school property taxes in timber-producing counties, primarily in Western Montana.


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