By Tim Leeds
The complex funding system for K-12 public education allows a .9 percent, or even a 1.4 percent, increase to allow a decrease in actual spending.
The Office of Public Instruction has distributed documents to the state's school districts which show that Gov. Marc Racicot's proposed 1.4 percent increase over the 201-2003 biennium will, due to estimated decline in enrollments, actually cost the schools more than $25 million over the biennium, and allow the state to spend almost $16 million less on education.
Gov.-elect Judy Martz has reduced the increase to .9 percent in her current budget, reducing the amount schools would receive by even more.
Schools in Montana are facing declining enrollment, which reduces the total amount schools receive on a per-student basis. Ric Floren, director of operations for Havre Public Schools, said that, for example, if the state gives a 3 percent increase in base funding but a school's enrollment declines by 2 percent, it only receives a net 1 percent increase. If the enrollment declines more, the school could not receive any increase, and actually lose budget authority.
Floren said the projected enrollment decline for the state is about 2 percent, causing the .9 percent, or even 1.4 percent, increase to result in a decrease in state spending.
Further confusing the issue are varying rates of the budgets that the state pays to different school districts. The state paid 41.6 percent of the maximum school budget last year, and is paying 44.7 percent of the maximum this year, in Direct State Aid (DSA).
The state may also pay a portion of the remainder of the budget up to 80 percent of the maximum, the Guaranteed Tax Base Aid (GTB), depending on the number of students compared to the district's taxable valuation. What the state doesn't pay of that portion must be made up by local tax levies. Districts are required to budget at least 80 percent of the maximum allowed under budget caps. Any of the remaining 20 percent must be raised locally.
Increases in DSA don't actually increase school budgets at all. It simply shifts who is paying for the budget, from the local level to the state.
Since the state already pays part of the GTB for some districts, raising the DSA also has a varying effect on different districts. If the district receives no state GTB aid, it receives the full increase. If the district receives one-half of GTB from the state, it only receives a net one-half of a DSA increase. And, if it received complete aid from the state in GTB, an increase in DSA would result in no increase.
Floren and Kirk Miller, superintendent of public schools in Havre, said that this is a difficult time for the Havre schools, although they said many other districts are in much more difficult shape. A combination of declining enrollment, decreased taxable valuation for local taxes and Legislative funding increases below inflation have resulted in the Havre district shifting budgets and trimming programs as much as they can. Further funding decreases would require cutting entire programs, Miller said.
Floren said that, for the first time in four years, the Havre schools are also facing an apparent loss in enrollment from the October count to the February count. These two counts are averaged to determine state funding for the number of students for the next year. In the December school board meeting, Floren said they estimate a loss of up to 40 students in the Havre elementary district by the February count. The average would result in the district receiving funds for 20 fewer students next year.
Based on these and other estimates of future budget issues, the district's analysis shows that Havre could lose more than $235,000 in the elementary budget and, with no new levies raised, more than $240,000 on the high school side.
Due to budget caps set by the state to prevent unequal spending in different school districts, the Havre elementary schools cannot raise mills to make up losses in the district's budget authority. The high school is not at the cap yet, but is rapidly approaching it.
Miller said another problem is that the decline in enrollment does not generally justify cutting programs, which would be required if the state funding does drop significantly more. He said that a loss of 20 students would drop the per-student funding, but might be spread out over 18 to 20 classrooms, so the classes and teachers would still have to be maintained.