Facing a Challenge


Now more than ever, we know that our public schools are the heart of our community. For our children, school is a vital part of their lives, not just academically, but socially, emotionally, and developmentally.  Schools connect us, inspire us, keep our kids safe, and serve as a key foundation of our economy. Billings Public Schools is facing a significant shortfall in the elementary budget. There are local factors at play, but the real root cause of the challenge lies in a state funding formula that systematically disadvantages Billings and other AA schools in the state. This inequity must be addressed.  Billings’ future depends on high quality schools that equip students for careers and college. Regulatory barriers to student achievement can no longer be ignored.


We have a duty to make wise local decisions to ensure our schools run efficiently, and to do our part to make the required local contribution to school funding. But when the system is stacked against our kids, we need to Come Together.

What can we do?

Billings Public Schools (BPS) faces a multi-million gap in the budget that will grow over time, unless serious action is taken. The district has already frozen hiring, implemented a 10% across-the-board cut in operations, and proposed $2.6 million in cuts for the 2020-2021 school year. On July 7, voters will have a chance to vote on a mill levy to add $1.6 million in funding to close the gap. The levy and cuts are a part of a comprehensive budget reform strategy — the heart of which lies in ending the inequity in state school funding that harms Billings kids and their peers in other urban districts.

Step 1: Reduce Spending.

BPS implemented an elementary hiring freeze,  reduced operational costs by 10% across the board for the 2019-2020 school year, and has identified $2.6 million in personnel cuts for the upcoming year, including reductions in administrative staff. These targeted cuts are designed to close the budget gap while ensuring student safety, preserving accreditation, and reducing programs, rather than eliminating them.

Step 2: Improve Accountability & Transparency.

Superintendent Greg Upham has changed the way BPS will budget. Rather than working off of projections that assume only best-case scenarios, School Board Trustees – and the public – will now see budgets that provide three revenue projections: best case, worst case, and best estimate. By examining multiple scenarios, our elected officials can make better decisions and plan for a rainy day. Superintendent Upham has also changed the way that labor contracts are negotiated, ending the “us vs. them” old style collective bargaining, and instead getting everyone at the table to focus on the shared goal of ensuring high quality schools.

Step 3: Mill Levy.

Voters will be asked this July to vote on a $1.6 million levy for the elementary districts to avoid further cuts. That equates to a $0.82 monthly tax increase, or $9.80 annual increase, on a $100,000 tax-assessed home. On a $200,000 home, the impact would be $1.63 monthly, or $19.60 annually. Montana law assumes that voters will fund about 20% of their school budget through mill levy. There is a lot of economic hardship right now, and we need to make sure our schools have the resources to keep our kids safe.

Step 4: Fix the Formula.

Montana’s school funding formula is broken. It penalizes large districts and hurts our students.  The current funding formula says some students are worth more than others, and that just isn’t right. The formula also grants an identical lump sum amount to every district – no matter how many schools are in the district. Basic math tells us that won’t work.  Large school districts across the state are all battling this inequity, but Billings is the largest district by far, so we feel the negative impact more. Our legislators need to fix the formula.



There are two core issues that caused the budget situation we face today: a budget error locally and a fundamentally flawed state funding formula that disproportionally harms larger districts.


At the local level, when voters passed a bond to renovate elementary buildings and build two new middle schools, the School Board Trustees decided against a mill levy to fund operational costs, based on budget projections that showed the new costs could be absorbed in the budget. Those projections turned out to be wrong. When voters passed a mill levy in 2017, necessary staff were added in key areas — including reading and math intervention – but the underlying failure to address the true costs of the middle school went unresolved. The shortfalls were being patched with some one-time-only funds from prior years, but that pathway isn’t sustainable. At the start of the 2019-2020 school year, Billings Public Schools faced a $4.5 million shortfall.


When our new superintendent Greg Upham discovered a structural deficit in the elementary budget, he immediately went to work to close the gap. A hiring freeze was put into place, a 10% across the board reduction in operational costs was made, and a proposal to reduce payroll by $2.6 million was developed. Superintendent Upham has also chosen to freeze his own salary and continues to push his team to identify efficiencies. Those cuts close part of the gap, but a mill levy will be needed to balance the budget and avoid future cuts.


While these local reductions are the fiscally responsible thing to do, the real issue is the inequitable funding formula developed by the Legislature that hurts Billings’ students. The current funding formula gives a lump sum amount to each district – regardless of the number of schools in that district. That means that a small district with one K-8 school receives as much funding as Billings, with 28 schools. The formula also gives districts a per-student amount, but that amount declines for each additional student, commonly referred to as the decrement. More information on the state funding formula can be found here and here.


The state shouldn’t treat some students as more valuable than others. And it shouldn’t penalize urban areas for their size. Billings’ students deserve the same high-quality educational opportunity as any other child in Montana. It is time that the state recognize that.

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Let us know your thoughts about the upcoming Elementary School Mill Levy
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Understanding MT School Finance

Understanding MT School Finance

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Share your ideas with our school board. Email us sd2ideas@billingsschools.org


How did we get here?

In November 2013, voters approved a bond to renovate elementary buildings and build two, new, desperately needed middle schools – Medicine Crow and Ben Steele. At the time, revenue projections indicated that any additional operational costs could be managed within the existing BPS budget.  Unfortunately, those projections were wrong. At the time, the district had enough one-time-only funds to fill the gap, but the trajectory is unsustainable.


In May 2017, voters approved an elementary mill levy which added additional staff, instead of covering the operational gap. As the middle schools opened, the budget gap widened dramatically. In 2019, newly hired superintendent Greg Upham discovered the error, disclosed the information to the Board of Trustees and the public, froze hiring, implemented a 10% across the board cut in operational costs, and began identifying ways to reduce personnel to pre-2017 levels.


These cuts come in the midst of a much larger problem – an outdated Montana school funding formula that fails to provide equity to AA schools, like Billings. The Billings K-8 district – with 28 schools and nearly 12,000 students — receives the same lump sum funding as districts with 50 students and one building. Districts also receive a per-student dollar amount that incrementally declines, based on the number of students (the decrement)– meaning that the more students a district has, the less each one is worth to the state of Montana. More details on the school funding formula here. This cannot continue.

How much is the proposed mill levy?

The levy is designed to generate about $1.6 million in funding to help close the budget gap. If passed, the levy would result in an increase of 7.25 mills on the local tax base. That equates to a $0.82 monthly tax increase, or $9.80 annual increase, on a $100,000 tax-assessed home. On a $200,000 home, the impact would be $1.64 monthly, or $19.60 annually.

Didn’t we just pass a mill levy?

Yes. In 2019, Billings voters resoundingly approved new funding for the high school budget, to replace outdated textbooks and to reform Billings high schools with the high-quality career and technical education that the workplace demands. Montana law requires elementary and high school districts to be separate budgets and limits the flow of tax dollars between the two. We made a valuable investment in our high schools, and now we need to take a look at supporting our K-8 schools as well.

There isn’t really a budget crisis – the district just wants more money, like always. Why can’t the district just live within its means?

Like any business, Billings’ schools face rising costs over time. Labor and operational costs go up, but the Montana school funding formula isn’t set to reflect those costs. School funds provided by the state are indexed to a complicated formula that doesn’t reflect the current Consumer Price Index or labor costs. It is an outdated and overly bureaucratic approach that just doesn’t make sense.


Even though the state funding formula is badly broken, Billings Public Schools is still doing its part to reduce expenses, proposing $2.6 million in budget cuts. But mill levies are a natural part of the process. Montana’s school funding formula says that 80% of a district’s budget comes from the state, while the remaining 20% comes from local mill levies. Fully funding our schools means regularly passing levies.  Also, the total budget for Billings Public Schools is capped by law, meaning that there is an upper limit to spending in the district and a limit to mill levy amounts.

Isn’t this just going to fund more raises?

Mill levy funds will largely go to payroll costs, but not in the traditional sense of raises. Public school teachers work on contracts negotiated by their union representatives. The district is working hard to ensure fiscal responsibility in current negotiations, while still recognizing that education is a people business, and our teachers are our most important asset.


At the same time, Superintendent Upham has implemented a new approach to contract negotiations, focusing on shared interests and a vision for reform rather than the tired old “management vs labor” dynamic. Focusing on a mutual commitment to create and operate a high quality public education system allows both sides to develop a sustainable budget.

Why are you cutting teachers? Why don’t you cut overhead and administrative staff?

The overwhelming majority of the district’s general fund operating budget –over 90%– goes to payroll, so reducing the number of employees is the only way to get the budget in line. In developing the budget reduction proposal, Superintendent Upham laid out three core principles: ensure student safety, maintain accreditation, and reduce programs rather than eliminate them. With that framework, hard decisions were made to reduce some staffing costs.


Whenever school districts face budget issues, it makes sense to start at the top and take a good look at administrative costs. The budget proposal does include a reduction in central office administration.


In addition, Superintendent Upham announced he will freeze his own pay.

Won’t the budget cuts hurt student achievement?

In developing the budget reduction proposal, Superintendent Upham laid out three core principles: ensure student safety, maintain accreditation, and reduce programs rather than eliminate them. For example, the reductions to the Quest gifted and talented program will close two classrooms that serve about 40 total students. However, the Quest program will continue to provide services in elementary schools for eligible students.


Sometimes, difficult decisions can spark genuine innovation. After the budget cuts were announced, music teachers and parents joined together to find a way to reform band and orchestra offerings in a way that improves quality overall while still reducing expenses.


When parents and community members join the problem-solving process to bring fresh ideas to our schools, there really is no limit to what we can accomplish together. Start talking in your schools, at your workplace, and with other parents and teachers. The budget challenge we face is significant, but let’s embrace the opportunity to innovate and improve student outcomes. If you have a proposal or new idea, share it with us at sd2ideas@billingsschools.org.

Aren’t there other ways to fund these programs?

Perhaps – that’s why we are inviting parents, teachers, and community members to take a hard look at the way we educate our children. We have a chance, in light of significant budget limitations, to ask ourselves – what do we want our schools to do? And, how do we pay for it?


When the business community began approaching the district to express workforce concerns, we were able to really evaluate how we educated our high schoolers and prepared them to enter the world. We learned that our approach was outdated, and not responsive to real community needs – or student interests. That launched a transformational effort to reform career and technical education in the community – a conversation that resulted in new levels of private investment in equipment, and instructional supplies, and experiential learning to improve student outcomes.


This is our moment now to do the same for our littlest learners. How can we better ensure that children in our K-2 classes are ready to learn reading and math, so that intervention needs are reduced? How do we tackle the significant levels of trauma in young children, so that schools don’t need to invest so many resources in basic safety and behavior management? How do we provide a spectrum of learning opportunities, so that all students are progressing toward proficiency and mastery?


Parents and teachers banded together to reform the music program because of necessary budget cuts.  Let’s do more of that. Let’s take a look at how we educate our elementary students and find ways to innovate and modernize. We need the entire community to join that conversation. Share your ideas at sd2ideas@billingsschools.org.

Why are the arts always cut first? Why don’t you cut sports instead?

Billings Public Schools is made up of a K-8 district and a high school district, with separate funding allocations for both. So, cutting high school sports won’t free up funds for elementary programs.


Sports in middle schools, including eighth grade boys/girls basketball and volleyball, are being reduced as a part of the budget reduction proposal. We don’t have organized sports in the K-5 program to consider reducing.

How does the current state funding formula for education hurt BPS?

The funding formula has a few major structural flaws. First, every district gets the exact same amount of base funding – a lump sum amount that is the same whether the district has one school or 28 schools.  Second, due to the decrement, every district gets a per-student amount that incrementally declines as the number of students increases – meaning that on average larger districts receive less for each student than smaller districts. It is a fundamental issue of equity – no student in Montana should be worth less than another. Each one of our students in Billings Public Schools deserves to be fully funded in their public school education.

If there really is a problem with the state funding formula, why aren’t other AA schools facing the same kind of budget crisis?

They absolutely are. Most of the AA schools in Montana are dealing with the same issues as Billings Public Schools. However, Billings has 17,000 students in its K-12 system, compared with the second largest district, Great Falls, at about 10,000 students. When the funding formula is broken for the larger districts, the magnitude will always be greater in Billings because there are just more kids.

How do behavioral issues and student mental health factor into this problem?

Billings Public Schools is dealing with a significant increase in student needs related to mental health and childhood trauma. Estimates show that about a third of the children coming into Billings Public Schools have the kind of trauma that impairs their ability to learn and function in a classroom environment.  When rates of child abuse and neglect, homelessness, and substance abuse increase in the community, our schools feel that impact. With therapy and supportive services for young children, the learning and behavioral issues can be overcome – but those services are beyond the scope of the schools and in short supply across our community.


We are seeing a phenomenon of traumatized classrooms in our district – classrooms that have multiple children dealing with severe trauma, so much that basic classroom management and student safety is at risk. Managing these dynamics is costly and complex – and requires a broader community effort beyond just the schools.

I support the schools, but I already pay more in taxes than I can afford.

There is real taxpayer fatigue in Billings. Billings Public Schools is asking for a mill levy as a part of a much larger, comprehensive funding reform effort that includes budget reductions, better budget transparency and accountability, and a frank conversation with the Montana Legislature about the structural flaws in the current school funding formula.


If you have concerns about the way our schools are funded, contact your legislator. Contact information can be found at leg.mt.gov.

Does this budget crisis mean that the two middle schools were unnecessary?

No. Both new middle schools are at 90% capacity or higher – as are the elementary schools. Without both middle schools, the district faced real accreditation and safety issues due to the severe overcrowding. There is no excess of space in Billings schools.


The budget shortfall in the district really shows the flaws in the state funding formula. The formula doesn’t account for larger school districts needing more facilities than smaller districts. It’s one of the many issues we must change.

What is stopping this from happening again?

Upon discovering the shortfall in the elementary budget, Superintendent Upham implemented a hiring freeze and a 10% across-the-board cut in operations. In addition to holding the line on spending, the district began to reevaluate its budget procedures. Budgets are based on revenue projections – how many students will enroll, what property tax collections will be, and the like. Upon examination, it became clear that the district had been budgeting based on “best case” scenarios, creating a high risk of shortfall if something changed.


Superintendent Upham implemented new procedures that empower Board Trustees to make better decisions. Budgets will now be presented to the trustees, and the public, with three revenue projections – best case, conservative case, and “best estimate.” This increased awareness of the variables in education funding will allow for more responsible budget decisions to be made ahead of time.

What can I do to help?

At this time, the biggest need is communication. Talk with your friends and neighbors about Billings schools – share your experiences and what you hope to see our schools do in the future. Consider reaching out to legislators to express your opinion on the school funding formula. When candidates knock on your door this year, ask them about the funding formula and how it impacts Billings Public Schools.


When our schools return to normal operating status, volunteer in your school — or any school, if you don’t have children in the district. Be in the classroom as an extra set of hands, or as a substitute.  Volunteer as a crossing guard or a lunchroom helper. Participate in school projects and fundraisers.  If you are a parent, attend parent meetings. Be engaged in your school. You are a force multiplier – your time can make a huge difference.


And of course, vote in the upcoming mill levy and encourage your social networks to vote also. Ballots mail out on June 19 and must be received in the county election office by July 7.

Didn’t the district get a bunch of money from the CARES Act?

Yes, Billings Public Schools will receive about $3.2 million from the CARES Act, specifically to cover expenses related to coronavirus response and the need to support student learning during the shutdown.

Funds provided through the CARES Act can only be used for things directly related to COVID-19, so these one-time funds can’t be directed to the budget deficit or to ongoing expenses.  Specifically, BPS will use some funds for costs related to heightened cleaning and sanitation costs in the schools and a portion for summer learning for all grades during Summer 2020.  In addition, some funds will be directed to technology that was lent out to students participating in distance learning and may need to be repaired or replaced.  Finally, the district will use some funds to respond to any health or educational needs caused by COVID-19 in Fall 2020.