WHY IS THERE A BUDGET SHORTFALL?
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.