Revise school funding laws to clarify the legislature's authority related to inflationary adjustments
Summary
SB 258 amends Montana’s school funding statute, section 20-9-326, MCA, to clarify how inflationary adjustments are handled for several K-12 education funding components, including basic and per-ANB entitlements, data-for-achievement payments, special education calculations, and certain general fund payments. The bill keeps the existing method for calculating the inflation factor based on the Consumer Price Index and the 3% annual cap used in the present law base calculation.
The key policy change is that the Legislature is expressly authorized to provide school funding inflationary adjustments by law that differ from the calculated amount and may exceed the 3% limit. In other words, the bill clarifies that the statutory inflation formula does not restrict the Legislature’s broader appropriation and lawmaking authority to set different school funding adjustments in the budget process.
Impact
The bill would amend Montana Code Annotated section 20-9-326 and affect the statutory framework used by the superintendent of public instruction and the Legislature to build the K-12 education budget. It does not replace the CPI-based formula, but it clarifies that the Legislature may enact inflation adjustments outside that formula, including amounts above 3%, for the affected school funding entitlements and payments. This could influence future school finance appropriations, district funding levels, and the calculation of present law base amounts used in budgeting.
Sentiment
The bill appears to have been supported by a majority in both chambers, but by relatively narrow margins, indicating interest in the issue and some division over its implications. It passed the Senate committee and floor votes, and later cleared House committee and floor concurrence votes, but the close vote counts suggest the measure was contested. The bill was ultimately vetoed by the Governor, which indicates that executive branch sentiment was not aligned with the Legislature’s approach.
Contention
The main point of contention is the scope of legislative authority over school funding inflation adjustments. Supporters appear to favor clarifying that lawmakers can set inflationary increases different from the statutory CPI formula and can exceed the 3% cap when appropriating school funds. Opponents likely viewed the bill as expanding legislative discretion in a way that could alter the predictability or structure of school finance formulas, or as unnecessary given existing budget authority. The close committee and floor votes in both chambers reflect that this was a debated education finance issue.