Legislative staff brief Senate Education Committee on Montana school funding, GTB and an interactive dashboard

Julia Patton of the Legislative Fiscal Division and Pat McCracken, deputy research director in the Research Office, provided the Senate Education Committee a detailed briefing on Montana’s school district general fund and the components that drive state and local school funding.

The briefing matters because it framed how the legislature’s formula and local conditions combine to affect district budgets across Montana, and it introduced an interactive dashboard staff built to let legislators and local officials examine district-level funding, enrollment and revenue sources.

Pat McCracken told the committee that "school funding in any state and in Montana is incredibly complicated," and said the briefing would focus on the school district general fund and the formula that drives it. McCracken and Patton walked through constitutional and statutory context, budget mechanics and examples showing how districts with different tax bases and enrollments are affected differently.

Key points from the briefing

- Constitutional and statutory backdrop: McCracken noted Montana’s constitutional language on public education (Article X, Section 1 of the Montana Constitution) and identified Montana Code Annotated 20-9-309 as the statutory section that lays out the school funding formula and conditions for it. He emphasized that only the legislature can change the formula.

- Components and budget limits: Staff described a formula that establishes base (minimum) and maximum budget limits for each district. Five components are identified as fully state-funded (special education, basic and per-A&B entitlements among them); some components are calculated at different percentages when determining base versus maximum budgets. McCracken explained that A&B ("average number belonging") is an enrollment proxy that drives much of the formula.

- Guaranteed tax base (GTB) and how districts fill the bucket: Staff used a "bucket and blocks" handout and the new dashboard to show how the state’s guaranteed tax base area (GTB) sits between the base budget and what the state funds. McCracken said the statewide average in 2025 was about $280 million in guaranteed tax base aid and about $146 million in property tax to fill GTB areas; he added that, overall, "the 95 mills bring in around $450,000,000 or about half that amount right now." Patton and McCracken cautioned that the composition and timing of payments (guarantee account, Scepter account, state general fund) make it difficult to say precisely which revenue source funds which component in any given month.

- Examples and data tool: The staff demonstrated the dashboard and used district examples. Patton pulled up the Ennis K–12 district (Madison County) to show a district that does not receive GTB aid because of high property wealth relative to enrollment. They contrasted that with Browning, which receives substantial state assistance because of a low local tax base and higher federally non-taxable lands. They also showed Lambert (Richland County), where non-levy revenues from oil-and-gas activity substantially fill a district’s GTB and over-base areas.

- Impact Aid and other funds: Patton pointed out that federal Impact Aid—that compensates districts for federally connected children on non-taxable federal lands—does not flow through the district general fund but appears in the tool as a separate (nonbudgeted) fund. That means a district could appear to operate near base in its general fund while receiving Impact Aid in a separate fund.

- Enrollment smoothing and consolidations: Staff explained a statutory mechanism that allows a three-year average of enrollment for districts with declining enrollment (a "soft landing" designed to avoid immediate staffing cuts when declines are temporary). They also showed how district consolidations or changes in district type (for example, an elementary district becoming a K–12 district) appear in longitudinal data in the dashboard.

Committee exchanges and follow-ups

Senator Vinton relayed that the Montana School Business Officials’ president reviewed SB37 and said it would not create extra burden for district business officials. Senator Weber asked questions about how the formula treats enrollment decreases as well as increases; staff responded that certain mechanisms (including the three-year averaging) provide a soft landing when enrollments decline.

Patton said the dashboard is publicly available on the Legislative Fiscal Division website under the fiscal tab, and she walked committee members through how to find the tool and related documents. McCracken and Patton said they will distribute a direct link to the committee.

Why it matters locally

McCracken told the committee Montana has about 400 school districts and roughly 150,000 students; the combination of differing enrollments and widely varying local property tax bases makes equalization and GTB calculations central to how districts are funded. The presentation gave senators tools and examples to evaluate how proposed statutory changes could affect particular districts.