HELENA — Senate Bill 175, sponsored by Sen. Llew Jones, R-Conrad, and signed into law May 6, is an extensive revision of how Montana funds its public schools. Here’s a quick look at its major elements:
Basic entitlement payment: Increases and revises this lump sum state payment to each school district. The payment for high school districts goes from $262,000 this school year to $290,000 next school year, and $300,000 in fiscal 2015. Similar increases occur for elementary and middle school payments.
The payment also will increase incrementally when enrollment in a district surpasses a minimum level. For example, if your elementary school district has more than 250 kids, the payment goes up $2,000 for every 25 additional kids.
Per-student state aid: This aid has an inflationary increase of 0.89 percent this year and 2.08 percent next year.
Achievement data payment: The state will pay each district $10 per student this year to fund participation in an electronic data system tracking student achievement. The amount increases to $15 per student next year and $20 the year after that.
Money for unusual enrollment increases: If a school district anticipates student enrollment growth of 4 percent or 40 students, whichever is lower, it can get additional state funding that year.
Oil-and-gas tax revenue distribution: School districts with oil-and-gas production get to keep a portion of oil-and-gas tax revenue, up to 130 percent of their general fund budget. Under current law, any excess goes to the state treasury.
Under SB175, that excess oil-and-gas revenue is distributed to neighboring school districts seeing impacts from development.
Also, under current law, school districts must budget oil-and-gas revenue for at least 45 percent of their general fund. SB175 reduces that threshold to 25 percent, giving these districts more flexibility in spending that tax revenue.
Property tax relief: Beginning in the 2014-15 school year, SB175 is designed to freeze local school property taxes, which can be raised without a vote when a school district has higher budget authority. It uses natural-resource tax revenue to fund the tax freeze.