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Panel weighs updating school transportation reimbursements after two decades
Summary
House Bill 405 would raise state reimbursement rates for school transportation to reflect inflation since 2004; sponsor and proponents said the change would shift costs away from local property taxpayers but OPI testimony shows added state and county contributions with a net local property tax shift estimated in the fiscal analysis.
Representative Mark Thane opened testimony on House Bill 405 by showing graphs he said illustrate a 21‑year failure to update transportation reimbursement rates and a shift of costs from the state to local school districts. Thane said the bill would index reimbursement schedules to inflation and adjust rates by bus capacity and miles driven.
Emily Dean of the Montana School Boards Association, testifying for the Coalition of Advocates for Montana’s Public Schools, urged support and said the change would ‘‘lower property taxes by increasing transportation reimbursement rates’’ that have not changed since about 2004. She told the committee the state’s share of transportation funding previously was roughly 25% and is now closer to 10%.
Fiscal context: Paul Taylor of the Office of Public Instruction explained the bill would raise the state’s transportation contribution by roughly $8 million and would cause a corresponding county permissive levy increase of about $8 million; he said those changes would be offset by an estimated $16 million reduction in local over‑schedule property tax burdens, noting the schedule and over‑schedule calculations shape the final district effect. Thane said the revised schedule would account for bus capacities and days driven and that the fiscal note will show the full breakdown.
Why it matters: Sponsor and proponents argued that rising fuel and labor costs, along with fewer miles traveled as districts cut routes, have shifted the burden to property taxpayers and constrained services. Thane said school transportation reimbursments were last adjusted in 2004 and called the proposed update responsible.
Committee scrutiny: Members asked technical questions about permissive levies, how county permissive mills interact with district budgets, and whether other recent property tax reforms affect the bill’s outcomes. OPI and the sponsor discussed how the BD bill (referenced by a committee member) would not change the transportation calculation but the interplay of county and district levies requires careful fiscal modeling.
Next steps: The sponsor closed by asking for a due‑pass and the committee closed the hearing. The fiscal note will be the key document for final appropriation and property tax calculations if the bill advances.
