Colstrip-area school leaders warn HB 156 and equalization could shift coal-mitigation revenue and raise taxpayer burden
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Summary
Board presenters said House Bill 156 moves equalization to the county level and pulls the coal mitigation block grant out of the district's base funding, potentially creating about a $1.6 million shortfall if those restricted funds are lost; reserves could cover operations for roughly two years but would deplete repair capacity.
Presenter explained the district's 2026 base budget uses a three-year enrollment average and totals about $6.2 million. The presenter said state STARS funds and other targeted sources supply much of that base; the state portion was listed at roughly $1.95 million.
The presenter called out a coal mitigation block grant of about $1.7 million awarded under the citation mentioned in the meeting as "MCA 29-638," saying the district is the only school in the state that receives that grant. "We are the only school district in the state that receives this coal block grant," the Presenter said, and added that the district uses coal gross proceeds and those mitigation funds to avoid tapping taxpayers for some expenses.
The district reviewed a new OPI funding worksheet tied to House Bill 156, which the presenter said has an "equalization" clause that moves equalization calculations from the district to the county. Under that change, coal gross proceeds and property taxes will be pooled at the county level, the presenter warned, meaning shortfalls in neighboring districts (Ashland, Forsyth, Rosewood, Bernie and Lame Deer) could require countywide taxpayer contributions rather than coming solely from Colstrip-area taxpayers.
The presenter described two immediate fiscal effects: first, the mitigation block grant was moved out of the district's base funding and is now used to fund over-base or equalized allocations; second, statutory language that previously protected restricted coal-mitigation money (the section attendees called out in the meeting) was removed, and district attorneys advised against touching the restricted mitigation funds because doing so might trigger repayment obligations. "I ran this by attorneys and they said, 'Do not touch that money, because we would have to pay back 1.6 for however many years they want us to,'" the Presenter said.
Presenter quantified other revenue and reserves: At-Risk Student Fund receipts were about $17,000 this year (compared with $50,000 last year), achievement dollars around $12,000, interest earnings about $25,000, small local revenue near $4,700, and tuition from out-of-district students budgeted at about $25,000 (billed but not yet collected in some cases). The presenter also listed a flex fund (~$700,000), building reserve (~$890,000), and a retirement reserve (~$1.3 million), plus a miscellaneous account holding wind-farm abatement receipts.
The presenter said the district could operate for roughly two years by drawing on those reserves if the mitigation block grant were removed, but doing so would deplete the district's ability to pay for building repairs or respond to emergencies. "If the full mitigation block grant goes away ... we could operate for about 2 years if we drained all these funds," the Presenter said.
Board members asked clarifying questions about Impact Aid (federal aid for students living on tribal or other federal land) and the district's ability to collect tuition billed to homeschool families under recent law changes; the presenter said Impact Aid is declining but pays for specific items such as the activity bus and half the pool.
Next steps: board members said they will continue to ask questions of OPI and the legislature, track the funding worksheets, and share updated numbers with the public as they become available.
