Legislative fiscal staff outline OPI’s $255 million HB2 request; superintendent seeks $5 million for third-year math and $700,000 for ACT testing

The Appropriation Joint Subcommittee for Education heard a detailed fiscal analysis of the Office of Public Instruction’s (OPI) House Bill 2 budget request and follow-up elected-official requests on database modernization, teacher licensure funding and implementation of new math standards.

Julia, fiscal analyst with the Legislative Fiscal Division, told the committee that “OPI’s 2027 biennium House Bill 2 budget request is approximately $255,000,000 or about 10% above the fiscal year 2025 base.” She outlined program-level highlights, fund shifts and decision packages that underlie that request.

The fiscal analyst said recent inflection points in OPI funding included the elimination of block grants beginning in 2017, a temporary rise in federal COVID SR funding in 2020, and a 2023 fund shift tied to House Bill 587 that moved revenue associated with the 95 school equalization mills from the general fund to the state special revenue guarantee account.

Why it matters: the state-level program funds OPI’s central administrative functions and systemwide services; local assistance (primarily K–12 base aid) represents roughly 83% of OPI’s spending and most HB2 dollars flow to local school districts. The committee’s review focused on (1) how OPI will pay for ongoing costs created by one-time federal investments (for example, the teacher licensure platform), (2) a database modernization subscription (PowerSchool), and (3) superintendent-requested changes to support assessment, math standards implementation and agency capacity.

Key program details and requests

- Teacher licensure (DP 616): Julia described a fund switch request that would move 2.5 positions and their associated personal-service authority from the general fund to the teacher licensure state special revenue account (licensure-fee account). The fiscal analyst said the licensure account’s projected revenues were higher than the governor’s budget authority, and OPI requested an additional $49,000 of authority because projected revenues were about $436,000. The LFD summary shows the switch reduces general-fund appropriation for those positions to zero and increases state special-revenue appropriation, with a net reduction noted in the LFD tables.

- PowerSchool / database modernization (DP 608): Julia said the database modernization law (House Bill 367, 2023) required a commercial off-the-shelf product and OPI contracted with PowerSchool. The request includes ongoing general-fund subscription costs beginning in fiscal 2027. Chair Beattie asked the superintendent to provide the committee and the Education Workforce Data Governance Board’s perspective on project status and any legislative actions that might be needed to support data sharing and privacy.

- State-level activities program: the LFD summary shows a roughly $10 million (about 15%) increase over the FY2025 base for the state-level activities program, including present-law adjustments for personal services, IT subscriptions, PowerSchool, the Digital Academy Clearing House and high-school assessment funding.

Superintendent’s elected-official requests and rationale

Susie Hedlund, Superintendent for the Office of Public Instruction, presented elected-official requests and framed them in terms of improving customer service, grant management and support to schools. Hedlund described three principal requests brought to the committee:

- A request of $5,000,000 to implement the newly approved third-year high-school math requirement and to develop alternate pathways (data sciences/statistics, career-technical applied math) and teacher professional development. Hedlund said the $5 million is a narrower initial proposal than the larger $30 million estimate produced in the broader fiscal note, and explained planned uses: curriculum development, teacher professional development, middle-school math supports, and two years of one-time purchases of instructional materials for an estimated subset of high-school students.

- A request for additional agency staffing (five FTE equivalent) and associated general-fund authority — described in the presentation as about $630,000 in fiscal 2026 and about $648,000 in fiscal 2027 (inflation-adjusted) — to strengthen customer service, fiscal and grant management, and legal capacity.

- A one-time request for high-school assessment funding (ACT with writing) to administer the high-school assessment requirement to accredited schools: about $640,000 in the first requested year (reflecting some carryover funds) and $700,000 in the second year.

Hedlund described the math request as focused on alternate pathways and teacher preparation for that third year rather than a full K–12 curricular overhaul, and she told the committee she planned to collaborate with OCHE, the Board of Public Education and industry partners on career-technical math pathways.

Indian-education (Macy / MACI) clarification

Senator Wendy Boy asked committee members to distinguish the Indian language programs listed in OPI’s materials. McCall Flynn, executive director of the Board of Public Education, told the committee “Macy is not in statute. It is created by the Board of Public Education under the advisory council statute,” and said Macy (the Montana Advisory Council on Indian Education) meets regularly and produces recommendations for the board and OPI. Hedlund and Flynn both asked to provide the committee a roster and examples of recent Macy recommendations; Hedlund said Macy had issued guidance on issues such as graduation regalia and that renewed funding would restore the council’s activity.

Questions and follow-up direction from the committee

Committee members raised multiple follow-ups. Chair Beattie asked the superintendent to provide, by the next scheduled OPI day, (1) an assessment of PowerSchool project status and the Education Workforce Data Governance Board’s perspective, (2) staffing history and utilization rates for OPI positions from FY2016 to present, and (3) an exploration of whether OPI could reduce teacher-licensure operating costs by leveraging the Department of Labor and Industry’s licensing system or other options. The superintendent agreed to supply a list of Macy members, further information on the teacher-licensure fund balance, and to investigate cost-saving options for the licensure platform.

What was not decided

No formal votes or final appropriations were taken during the hearing. The committee asked for follow-up materials and signaled that these OPI items will be revisited during later OPI hearings and at the committee work session.

Ending

The committee recessed to the next business. Members said they expect to review OPI follow-up materials and to discuss the OPI budget and elected-official requests in future meetings and the work session.