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House bill would create reconciliation mechanism to close multi‑year inflation gap in school funding, fiscal impact debated
Summary
House Bill 266 would change the statutory approach to calculating and reconciling K‑12 inflation so the legislature can close the multi‑year gap created when the current three‑year average calculation is capped at 3 percent.
House Bill 266 would change how Montana measures and reconciles K‑12 inflation so that funding keeps closer pace with actual inflation over time. Sponsor Rep. Luke Muszkiewicz told the House Education Committee the bill is intended as a backstop to ensure “a dollar of school funding in 2025 goes as far as a dollar did in 2020 or 2015.”
Legislative Fiscal Division figures presented to the committee showed a multi‑year “inflation gap” created by the statutory method using a three‑year average and a 3% statutory cap. Muszkiewicz cited LFD numbers that, if uncapped, would have increased K‑12 base aid by about $17.2 million in FY25 and larger amounts in later years; the fiscal note attached to HB266 quantified a longer‑range gap at roughly $92.5 million.
Lance Melton (Montana School Boards Association) and other education advocates urged support. Melton told the committee the fiscal note is accurate but said completion of other measures in the session (including the STARS act and House Bill 15) would substantially reduce the remaining reconciliation amount the bill would ultimately address.
Opponents, including Bob Story of the Montana Taxpayers Association, urged caution and argued the legislature already has mechanisms (House Bill 15 and the governor’s budget recommendation) to fund inflation and that decennial study work would be the correct forum for structural changes.
Paul Taylor of the Office of Public Instruction answered technical questions about how the statute currently calculates the K‑12 inflation request to the governor (a statutory three‑year average adjusted and capped in certain years) and how the bill’s reconciliation timing would interact with budget preparation. Committee members discussed the fiscal scale of the bill and whether future appropriations and other bills would reduce the fiscal note.
The hearing closed with proponents and opponents making contrasting fiscal arguments; the bill will move forward through committee consideration.
