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House committee hears bill to apply statutory inflation adjustment to K–12 base aid
Summary
Lawmakers and education groups urged quick action on HB 15, which applies the statutory CPI‑based inflation adjustment to Montana’s K–12 base funding formula; OPI analysts said the uncapped formula would calculate 5.67% for FY2026 and 4.83% for FY2027, but statute caps annual increases at 3%.
Representative David Beatty, sponsor of House Bill 15, told the House Education Committee the bill would apply the statutory inflation adjustment to the K–12 base aid funding formula so school districts can plan budgets ahead of the next school year. “Article 10 of Montana’s constitution stipulates that the legislature must fund and distribute in an equitable manner … the state’s share of the cost of the basic elementary and secondary school system,” Beatty said in opening remarks.
Several education organizations testified in support. Emily Dean, director of advocacy for the Montana School Boards Association, speaking also for the Montana Rural Education Association and Montana Association of School Business Officials, called HB 15 “one of the most crucial bills of this session for schools” and urged the committee to move the bill so districts can maintain learning opportunities and operations. Rob Watson, speaking for school administrators, said early passage helps districts hire teachers and plan for special‑education costs.
Paul Taylor, a budget analyst with the Office of Public Instruction, provided the technical detail committee members requested: the CPI‑based formula in statute (20‑9‑3‑26) produces an uncapped inflationary adjustment of 5.67% for fiscal 2026 and 4.83% for fiscal 2027, but the statute caps annual increases at 3%. Taylor also explained that some base‑aid components are fully state funded while others are shared with local taxpayers; he cited a state share of about 44.7% for certain components and a local share of approximately 35.3% toward the formula’s 80% target in the base area.
Witnesses and members pressed staff on how the formula is calculated, the Consumer Price Index series used, and whether the CPI has tracked local cost pressures historically. Taylor said the formula uses a BLS CPI series and that an LFD analysis and OPI materials are available for members who want historical comparisons. In closing, Beatty acknowledged projection uncertainty but said the three‑year look‑back produces elevated calculated values because of the 2022–23 inflation spike; he urged prompt committee action so districts receive numbers for planning.
The hearing closed with the chair moving to the next agenda item; the committee did not take executive action on HB 15 at today’s meeting.
