If every Montana school district had as many students as Billings Public Schools does, there would only be nine districts statewide. Instead, there are 400 and Billings with 17,000 students K-12 is the outlier.
This size issue is important as Billings school leaders work to bring annual K-8 spending in line with the revenue that state law allows its largest district to collect from taxpayers. Because more than half of Montana school districts have fewer than 100 students and many have fewer than 50, the state funding formula makes important allowances to support very small schools, recognizing that baseline funding is needed to educate rural students.
That same recognition of need is sorely lacking for Montana's largest district, and for other districts that require multiple buildings to educate thousands of students.
Two major components of Montana's complicated school funding formula shortchange larger school districts:
- The basic entitlement, which is $52,105 this school year for the every K-6 district. That money is paid to each district, not each school. Billings' 22 elementary schools and six middle schools are funded as if they were one big school building. Under the law, Billings schools get half of a basic entitlement for each additional 250 students beyond the first 250. Billings' basic entitlement is $1.35 million to cover all 28 schools, according to Craig Van Nice, chief financial officer for Billings Public Schools.
- Per pupil funding called ANB (average number belonging). The per ANB payment for last school year was $5,573 for the first elementary pupil, and the amount is decreased by 20 cents for each additional student up to 1,000 students. Schools with more than 1,000 students receive $200 less per student than the state allows for the first student. Billings has 9,177 ANB in K-6. The funding formula reduces payment for 8,177 of these children to the lowest per pupil level.
The state funding formula allowed $7,136 per ANB spending for the first grade 7-8 student in an accredited middle school last school year. That allotment was reduced by 50 cents for each additional student till the 799th student is allocated $6,734. That $400 per pupil reduction adds up in Billings with 2,826 grade 7-8 students.
The state funding formula appropriately recognizes that all districts need more money to provide the high quality education that meets middle school accreditation standards. For districts without an accredited middle school, the ANB funding is the same as for K-6 students.
In Billings and many other Montana districts, middle schools serve grades 6-8, providing specialized teachers and a wider range of educational opportunities starting in sixth grade. However, the state funding formula does not provide any additional budget authority for educating sixth-graders in middle school.
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Another constraint on Montana school spending is the minimal inflation factor the Legislature has approved in the past two biennial sessions. The inflation factor for this school year is the minimum required by law and just under 1%.
Before 2015, Montana schools received inflationary increases of around 2% per year, and in 2011 received 3%, Van Nice said. Inflation factors under 2% make it very hard to cover rising costs for salaries, benefits, classroom materials and other costs of running the schools, he said.
Van Nice and Superintendent Greg Upham have told the school board that a $4 million reduction in the K-8 budget is necessary to bring spending in line with revenues.
School trustees are expected to ask voters to approve an operating levy increase in May, but the funding formula will limit that request to about $1.5 million. That's the difference between what the K-8 district is spending now and the maximum budget state law will allow it to spend based on enrollment. The exact levy limit won't be known until the schools take their February enrollment count, which must be averaged with the October enrollment count to calculate the maximum budget for next school year.
Montana school funding is way too complicated. Simplifying the formula would help lawmakers and their constituents better understand the system and the needs of their local schools.
We call on Billings legislators and everyone considering a run for Legislature in 2020 to educate themselves about school funding. They must be champions in Helena for the 17,000 children in Billings Public Schools. Billings kids deserve a fair deal based on what it actually costs to provide quality education that meets state accreditation standards.