Representative David Beatty, sponsor of House Bill 15, told the House Education Committee that the bill applies statutorily determined inflation adjustments to the K‑12 base aid formula used to set the minimum funding districts receive.

The measure implements the inflation calculation in 20‑9‑326, Montana Code Annotated (the CPI‑based, three‑year compound growth method) with the statutory 3 percent cap. That cap, Beatty and multiple proponents said, allows districts to plan budgets, negotiate contracts and begin spring hiring.

HB 15 would apply the statutory inflation factor to the several components of the base aid formula used to compute the state share and the portion borne by local property taxpayers. "This bill provides for the present‑law based inflationary adjustment for schools and assists in ensuring Montana's public schools can maintain learning opportunities and school operations," said Emily Dean, director of advocacy for the Montana School Boards Association. Rob Watson, speaking for school administrators, told the committee that an early decision on the funding bill helps districts recruit and hire teachers in the spring.

Paul Taylor, budget analyst with the Office of Public Instruction, explained how the CPI formula works and the practical effect on rates. He said that, if the inflation formula were uncapped, the calculated inflation factor would be 5.67 percent for fiscal 2026 and 4.83 percent for fiscal 2027. The statute’s cap limits the annual increase to 3 percent, the figure that HB 15 would apply unless the Legislature acts differently. "There’s a formula in statute that refers to a particular CPI for determining these inflationary increases," Taylor said.

Taylor also summarized how responsibility for costs is shared under the formula: certain components are fully state‑paid while others are shared. He said the state pays about 44.7 percent of the per‑a and per‑b components and the basic entitlement; to reach the statutory base funding the remaining share is borne by local taxpayers (described in committee as approximately 35.3 percent of that component to reach the 80 percent base portion). He further explained the special education allowable cost payment is largely state‑funded but that the base formula includes an additional local component (described in testimony as a 40 percent local share in the base area).

Proponent groups that testified in support included the Montana Rural Education Association, Montana Association of School Business Officials, Montana Quality Education Coalition, the Montana Federation of Public Employees and the Montana Budget and Policy Center. Susie Hedalen, Montana Superintendent of Public Instruction, said having the numbers early lets OPI provide the budget sheets districts use in March. Bob Story of the Montana Taxpayers Association told the committee the association supports the bill as a necessary step tied to the state's constitutional duty to fund basic education under Article X of the Montana Constitution.

Committee members asked multiple technical questions about how the formula splits state and local shares, how the CPI is calculated (federal Bureau of Labor Statistics indices applied per statute), and whether the CPI has historically tracked actual costs. Taylor offered to provide the committee with historical comparisons and a two‑page handout that diagrams how the formula’s components stack up.

Beatty closed by noting that the CPI calculation looks back three years and that recent inflation spikes create a larger calculated value that is then capped; he urged the committee to act promptly so districts can plan. The hearing on HB 15 concluded with the bill left for further committee action—no committee vote was recorded during this hearing.