With Governor Bullock proposing to invest $12 million on early childhood education, policymakers and parents are wondering how long the benefits of preschool last. A new study of early education programs in North Carolina helps to answer that question. As it turns out – attending a high quality preschool can benefit children not only in the short run, but for years to come.
Kids who attended one of North Carolina’s state supported preschool programs had higher test scores, and were less likely to repeat a grade or to need special education. The study followed one million children from preschool through fifth grade. From 1995-2010, researchers tracked over 15 years of students who attended the preschool program.
By the time the children were in fifth grade, the benefits from attending preschool either remained constant, or even grew. This research shows that the benefits of preschool are long-lasting.
While in the past some critics of publicly funded preschool have suggested that the initial boosts children gain might fade as they enter elementary school, this study suggests that the “fade out” effect is likely due to the quality of the preschool program itself.
High quality preschools, like the program in North Carolina, must meet certain benchmarks, according to the National Institute for Early Education Research (NIEER). These include a low child-staff ratio, teachers and assistants with education and training in early childhood education, and comprehensive early learning standards.
But a high quality preschool education must go beyond the minimum standards, according to early childhood researchers. The National Association for the Education of Young Children (NAEYC) emphasizes the need for children to feel secure in their environments, have opportunities to explore and play, programs that promote intellectual, social, and physical development. Quality preschool programs, like the ones Governor Bullock is recommending funds for, can benefit children for years to come.
If Montana chooses to invest in early childhood education, as over 40 other states have already done, we too can provide our children with lifelong benefits. Earlier research on preschool has shown that attendance can lead to higher rates of high school graduation, college completion, and employment, as well as reduced rates of teen pregnancy and the need to use public assistance. Investing in early childhood education can also help strengthen our economy, by enabling parents to work while reducing the cost of childcare, providing jobs for early childhood educators, and helping to prepare our children for the day they will enter the workforce.
Although Governor Bullock’s proposed investment in early childhood education is less than half of what he proposed in the previous biennium due to lower revenue levels, this move to provide high quality opportunities for young children is a step in the right direction. We should not miss this opportunity to support our youngest Montanans.
For additional information on the benefits of early childhood education, be sure to read our reports on the topic. To follow future developments in the move for early childhood education, check back here for more updates.
We learned this week that the Department of Revenue settled a property tax dispute with NorthWestern Energy, which will lower the overall market value of its centrally-assessed property from what DOR had originally certified as the value for 2016. We thought this would be a great opportunity to do a quick refresher course on property taxes, how they are assessed, and what this will mean for you and your community.
First, let’s go through some basic information on property taxes.
NorthWestern Energy is the state’s single largest property taxpayer, and the company is a centrally assessed taxpayer. Centrally assessed property is property owned by a company operating as a single entity and connected across county or state borders. This includes things like railroads, telecommunication lines, power lines, natural gas or oil transmission lines, and airlines.
How are property taxes calculated?
The Montana Department of Revenue is in charge of appraising – or valuing – property in the state every other year (for centrally assessed, it happens every year). This amount is called the market value. The Department determines the market value for the entire company and then assigns pieces of that value to counties and local jurisdictions based on the percent of property (or mileage) in that jurisdiction. The Legislature has assigned a tax rate to each type (or class) of property, including types of centrally assessed property. The market value is multiplied by the tax rate to determine the taxable value. On a local level, individual local taxing jurisdictions (this would be city and county governments, local school districts, and some smaller special districts, like fire districts) determine the amount of revenue it can levy (with strict limitations) to help fund schools and local government operations, called mill levies. A mill levy is a tax rate per thousands dollars of taxable value of property. Once the taxable value is determined, each local taxing jurisdiction applies the mill levies to the property’s taxable value to determine the property taxes owed.
How each local government and school determines the number of mills it can levy is based on complicated formulas, which are primarily tied to the local government’s or school district’s current budget, the overall tax base in the jurisdiction, and some slight modifications based on inflation and growth. In this case, the Department of Revenue had already certified the total tax base for each local taxing jurisdiction, so counties and local governments had already set their mills.
So what happened with NorthWestern property value?
Toward the end of 2014, Northwestern Energy purchased eleven hydro facilities from PPL Montana for about $870 million. NorthWestern has also reported increased acquisition of natural gas assets and a series of upgrades to its system. All of these changes impact the value of the company. The Department of Revenue took into account this additional value for purposes of 2016 property taxes, and certified taxable values for counties reflecting this increased value.
NorthWestern Energy informally disputed the Department of Revenue’s new market value, and from statements made in the press, it sounded like this could have been headed toward a formal protest, which bottles up a good portion of the tax owed and puts schools and local communities in a very tough spot. The final settlement on this year’s tax bill reduces NorthWestern Energy’s total tax bill by about 8 percent.
What does this mean for local communities?
For those taxing jurisdictions that include NorthWestern Energy property, they will see their overall tax base go down and will generate less property tax revenue (at the current level of mills). Of the 1,300 taxing jurisdictions in Montana, about 900 will be impacted by this settlement. The below chart shows the difference in taxes assessed, for all taxing jurisdictions located in that county. (This is not what the county government gets, but for sake of simplifying the 1,300 taxing jurisdictions, we’ve lumped them together by county to give a sense of where impact is greatest.) For most, the percent change in total taxes assessed is less than one percent. However, for a community or taxing jurisdiction with a large NorthWestern Energy presence, the impact is greater – between two and five percent change.
Because this settlement will have such an impact on some communities, the Department will allow local taxing jurisdictions to request a new certification of the tax base. In that case, it can then go back and change its mills to make up the loss in revenue. This would mean a potential increase in property taxes for all property taxpayers in the jurisdiction.
What are we hearing so far from communities?
Some local jurisdictions have said they will absorb the loss in revenue – through the use of reserves or possibly cutting back services. But for some communities, this loss of tax base will have real implications for budgets and how it provides services in the community, and it may need to request recertification to recoup much-needed revenue.
|Taxing Jurisdictions, by County||Total Taxes Assessed OLD||Total Taxes Assessed NEW||Total Loss in Taxes Assessed|
|Lewis & Clark||$12,317,248.25||$11,289,248.17||$1,028,000.07|
A shortage of teachers in our public schools spells trouble.
The Great Recession caused just that – a dramatic decrease in the number educators available to teach our children. As a result of budgetary cuts on all levels of government, the number of educators in our public school system fell drastically over a four-year period, causing children to be squeezed into overcrowded classrooms and lose opportunities to receive a top quality education.
Recently, the number of teachers at the front of the classroom is back on the rise. But nationwide, we still have 214,000 fewer teachers than we did at the beginning of the recession. Not only that, but during that time, we should have added an additional 158,000 to meet the needs of a growing population.
This trend has tested Montana as well. Last year, the state had over 1,377 open positions, nearly half of which were in critical areas such as special education, English, math, and science. An additional 540 of these were elementary school teachers.
In Indian Country, the shortage is even greater. A ten percent cut to the Federal Impact Aid program during the sequestration of 2013 meant school district on reservations had a tougher time filling positions with deep funding cuts.
It doesn’t help that Montana has the lowest average starting teacher pay in the country at $27,000, an amount too low to attract the number of quality teachers needed, especially in remote, isolated schools districts. The state’s Qualified Educator Loan Repayment program helps attract teachers to rural and high-need schools; however, the program doesn’t fully address teacher shortages across the state.
While Montana has increased our funding to public schools in recent years, we still have a lot of catching up to do in order to guarantee that all of our children are getting the education that they deserve.
Montana’s teachers are at the very heart of a quality education. When the spot at the front of the classroom is left open, our children pay the price.
A new report released today takes a look at states’ tax expenditures that benefit private K-12 schools, revealing that some wealthy taxpayers can actually turn a profit from these tax credits. You’ll recall that the Montana legislature passed one of these measures last session, which went into law in 2015. The bill (SB 410) allows a taxpayer to take a tax credit for a donation to an organization that provides scholarships to private school students. MBPC released a report raising concerns about this – and several other proposals – that divert state taxpayer dollars from investments in our quality public schools to private schools.
But the report by the Institute on Taxation and Economic Policy (ITEP) does more than just raise concerns about taxpayer dollars benefiting private institutions – it reveals that some high-income taxpayers are actually able to turn a profit as a result of this credit. This means that for some wealthy taxpayers, they can actually get a total tax cut that exceeds the size of the original donation.
How is this possible?
ITEP goes into a lot of detail on how this scheme works. In summary, the Montana tax credit is structured to reimburse a taxpayer for 100 percent of the cost of the donation (in Montana, capped at $150, or $300 for a married couple). In other words, for a household with tax liability, a donation up to the cap essentially costs nothing to the donor and is fully-funded by Montana taxpayers. To add to that, IRS also allows taxpayers to take a federal charitable deduction for their private school donation.
While most taxpayers would have a corresponding reduction in their federal deduction for state income taxes paid (and it would then be a wash), taxpayers who are subject to the federal Alternative Minimum Tax (AMT) are under different rules and can use the charitable deduction to lower tax liability and “double-dip” on the tax benefit of the donation. Depending on their marginal tax rate, these households could receive up to $105 in profit on the donation. In Montana, nearly 10,000 taxpayers are subject to the federal AMT, and about 80 percent of those have incomes more than $200,000 a year.
This tax scheme doesn’t benefit students or our education system, but instead benefits high-income households that can take advantage of a sophisticated tax planning technique.
Montana is not alone. Ten other states have similar “profit-making schemes” structured as private school tax credits. In fact, the levels of profit possible in some states are staggering. As ITEP notes, the cap on Montana’s credit limits the amount that one can profit – but profit, nonetheless.
Montana taxpayers and the state legislature should take note of how this credit can be manipulated by a small percentage of wealthy households and consider repeal (or at the very least, refrain from expanding this terrible policy).
In today’s economy, more and more families struggle to get by on low wages and to provide resources that enable their children to succeed. Access to quality and affordable child care is one solution that enables parents to maintain stable employment and provides children with the skills they need to succeed in school and beyond.
While current child care costs are often out of reach for many low-and moderate-income families in Montana, some families can receive assistance through the state’s Best Beginnings Child Care Scholarship program. Unfortunately, because of application and eligibility requirements and inadequate federal and state funding, not all families who need child care assistance receive it. Program changes, like increasing eligibility limits to federally recommended levels, and significant state investments to increase reimbursement rates for child care providers would help ensure that more low-income families are able to receive assistance to pay for child care. It would also ensure that low-income families are not subject to additional costs beyond their means and enable them to access high-quality care options in their communities.
A few weeks ago, the Montana Budget and Policy Center released its new report – The Montana We Could Be. The report details how the income tax cuts passed in 2003, which largely benefited wealthiest households – has resulted in millions in lost revenue. This revenue could have gone to targeted investments into our communities. One area of focus is the ongoing needs in infrastructure – maintaining roads and bridges, water systems, and quality schools. As shown in the chart, the needs far exceed current levels of funding. Last session, the legislature failed to pass a bipartisan infrastructure package, which would have provided $150 million for new infrastructure projects.
As another school year is about to start, several long-time teachers – residing in three Montana communities – highlighted the need for investments in education, including school facilities. Teachers across Montana do an incredible job each day ensuring that our children are given the opportunity to succeed in this state. But too often, educators are faced with teaching our next generations in facilities that fail to provide the 21st Century learning environment that our children need to succeed in today’s world. Even worse – basic maintenance issues continue to stack up – leaking roofs, impaired heating systems, and electrical problems. More than two-thirds of Montana’s schools were constructed before 1970, and a report from 2008 shows overall deferred maintenance needs exceeds $900 million.
We can and should do better. As our report and yesterday’s op-ed highlights, Montana is faced with a tight budget, in part, due to tax cuts put in place over a decade ago. These tax cuts – billed as a way to grow the economy – resulted in deep tax cuts for the wealthiest households, while the vast majority of Montana families saw little or no benefit. Over the past decade, these tax cuts have cost the state nearly $1 billion in lost revenue – revenue that could have been invested in our children and our communities.
Meanwhile, local cities and towns – and local property taxpayers – are left holding the bag to ensure our neighborhoods and schools can thrive. While state K-12 funding has increased over the past two decades, property tax revenue used to pay for education has increased at a much greater rate.
Over the years, Montana families and our communities have stepped up to ensure our children can succeed. We know our entire state moves forward when we have a quality educational system. However, we also must ensure everyone is paying their fair share and carrying their weight. It is time to reform our tax system to ensure the wealthy are paying their fair share, so that we can invest in a brighter future for Montana.
Today, the Montana Budget and Policy Center will hear from one Montanan and her story what tribal college means to her.
The tribal college on my reservation has impacted my life more than any other organization, which is ironic because I never planned on attending college. I grew up in St. Ignatius, just 20 miles south of Salish Kootenai College (SKC). During my senior year of high school I transferred to Two Eagle River School, our tribal school that literally borders SKC, and completed early. I was eager to get out on my own and experience life outside the reservation. But as many of us discover, life outside the rez isn’t all it’s cracked up to be. I worked a couple of jobs but didn’t know what I wanted to do with my life. Luckily, my older sister enrolled me at SKC and told me to come home.
During my first year at SKC I had the opportunity to develop several basic academic and organizational skills, but I also learned what it meant to be a part of the SKC family. I got engaged to the student body president and we got married on campus in the Michel Building. Joe McDonald, the college president, emceed our wedding. Many of our guests were staff and faculty and many others were connected to the college in some way. We even lived on campus because my husband was the site manager for student housing. I felt support and love from the SKC family, which I was now a part of.
The next year I switched degree programs twice and we welcomed our first baby. I held a part-time job at the local travel agency and took classes that interested me, quickly discovering that I enjoyed and excelled in accounting. These classes helped me obtain a full-time job in the finance department at Mission Valley Power. Shortly thereafter, I completed my associate’s degree in general studies. Little did I know that this degree would open future job opportunities that would play a big role in changing our lives.
After the birth of our second child, I decided to put work and school on pause to focus on our family, which soon grew to four children. I stayed home with them for seven years, all the while living in student housing. My husband continued to work for the college and was also the women’s basketball coach. Living on campus and attending games and other events enabled me to remain active in the SKC family. My love and appreciation for the college continued to grow.
When I was ready to return to the workforce, my associate’s degree and the work experience I acquired because of my SKC classes helped me secure the payroll manager position for our tribe. The additional income made it possible for us to purchase our first home, a dream I wasn’t sure we would ever be able to realize. We moved out of student housing but were still very involved in the SKC family. In 2012, I applied for an open seat on the SKC Board of Directors. I am honored to be serving my second term and am currently the vice chair.
I strive to ensure that students find the same support and love that I did. I am forever indebted to SKC for lifting me up, leading me down a good path, strengthening my cultural knowledge, and always believing in me.
Presently, I am working full-time for our tribal housing authority. My position has afforded me the opportunity to finish what I started fifteen years ago. I have been attending SKC full-time for the past year and will be receiving my associate’s degree in business next month. I will continue at SKC until I earn my bachelor’s in business management. I will never stop being involved in and supporting tribal colleges because I know that they enable people like me to increase our overall quality of life by enabling us to access a broad-based education that allows us to obtain better jobs, helping to end cycles of poverty and dysfunction. They allow us to develop strong support networks that cultivate self-esteem and self-efficacy. Ultimately, they are a powerful and effective way for people to create a brighter future for themselves, their families, and our communities.
-Jody Perez is a member of the Confederated Salish and Kootenai Tribes. She is a past and current student at SKC and also serves as the Vice Chair on the SKC Board of Directors.
As we near graduation next month, many high school seniors and other non-traditional students are finalizing their fall college plans. This post highlights an often overlooked option for post-secondary study: tribal colleges, which play a critical role in educating and training workforces across our state and which provide a range of educational opportunities, from adult basic education and certificates to associate’s and bachelor’s degrees.
The tribal colleges located in the state of Montana play a critical role within the broader higher education system in the state. Out of the 32 fully accredited tribal colleges in the U.S., seven of them are located in Montana — one on each reservation, serving more than 5,000 students. Perhaps surprisingly, non-Indian students make up between 10-30 percent of the student body at tribal colleges in Montana. However, the colleges are only eligible for federal funding tied to the number of Indian students they serve. The state of Montana has recognized the critical role that tribal colleges play and provides a state investment tied to the number of non-Indian students enrolled. Although this investment provides some support to offset the expense of serving non-Indian students, it falls well below the amount the state provides per student to non-tribal community colleges and public universities.
Tribal colleges have expanded their enrollment demographic in recent years partly because they continue to be an affordable option for students and families and also because they have increased academic offerings. Tribal colleges provide job training opportunities that meet the needs of their local communities. Additionally, they have joined tribal leaders in efforts to preserve tribal language, history and culture. All the while, their modest size and structure has enabled to them to expand their degree offerings to reflect the broader job market. Many now offer degrees in information technology, business management, and entrepreneurship, as well as healthcare-related professions like nursing and psychology. They have also worked to develop coordinated agreements with colleges in the Montana University System, so that students can successfully transfer to a MUS school or access online courses to meet their academic and career needs.
Today, tribal colleges are a great option for any student looking for an affordable, close-to-home education that includes a smaller campus and a modest class size that affords them the personal attention needed for academic success.
Have you ever wondered how you can learn more about how Montana families are faring and what types of solutions are available to support them? Today, we’ll look at a comprehensive tool that sheds light on the financial security of Montana families and policies that could help them better make ends meet.
Every year, the Corporation for Enterprise Development (CFED) releases its Assets and Opportunity Scorecard, measuring the economic security of families in each state and highlighting how policies help or hurt their ability to make ends meet.
There are a number of scorecards and studies out there, but we find this scorecard to be one of the most helpful. It not only provides solid data, but also workable solutions that other states have implemented to help strengthen families’ economic security.
The scorecard is organized into five categories:
- Financial Assets and Income
- Businesses and Jobs
- Housing and Homeownership
- Health Care
New this year is the policy change map, which let’s you see policy gains and losses in each state.
CFED uses two measures – outcomes and policies – to better understand financial security in each state. Overall, Montana ranks 15th in outcomes. These outcomes measure things like rates of poverty, unemployment, and homeownership. CFED also lists policy opportunities to support families. Over the next week, we will dig deeper into some of the data and policy solutions, but here is a quick overview on how Montana fares:
Financial Assets and Income
Nearly one in six households in Montana are living in poverty, and there remains a large gap between high-wage and low-to-moderate wage earners. Over one-fourth of Montana households do not have a savings account.
Enacting a state earned income tax credit (EITC) is one of the best ways to supplement working parents’ income, helping them to catch up on bills, put food on the table, and rise out of poverty. Eliminating asset tests for programs like Temporary Assistance for Needy Families (TANF) help people focus on saving for the future and achieving self-sufficiency. Finally, tax fairness reforms are key to ensuring that corporations and wealthy Montanans are paying their fair share for the things we all need, like schools, police, and roads.
Business and Jobs
For the second year in a row, Montana scores high with small-businesses. However, almost one-in-three jobs are low-wage. Montana workers report that they feel underemployed – many want to work full-time, but are only offered part-time positions – and unemployment rates are twice as high for workers of color.
Enacting paid family and medical leave would help working parents better balance work and home demands by taking time off to attend to their own health needs or that of a family member without risking their financial security. Increasing unemployment benefits so that workers receive an adequate weekly wage while unemployed would help parents afford the basic needs while they search for long-term work opportunities.
With Medicaid expansion just recently up and running, it is not surprising that Montana still ranks low on health care outcomes. Montana has already enrolled over 22,000 individuals in affordable health care coverage. We know expansion will have a significant impact on the uninsured rate, and we look forward to seeing how we will compare in 2017.
We encourage you to visit the scorecard. Play around – it’s a lot of fun! And learn more about how Montana families are doing. Also, please follow us this week as we dig deeper into specific policy issues related to the scorecard.
This week was a big week for ensuring Montana kids and families have access to a quality K-12 education.
As many of you know, last week the county treasurers across the state sent out property tax assessments. This notice explains how much each property owner will be paying in the upcoming year, factoring in the property’s appraised value and the number of mills the property is subject to.
This is a good opportunity to revisit our Policy Basics piece on property taxes and the role these taxes play in providing critical local services in our communities, like schools, public safety, and infrastructure. Unlike other tax revenue streams, the vast majority – 81 percent – of property tax revenue is directed toward local governments and schools. With these funds, city and county governments provide essential services, like police and fire, and fund critical infrastructure projects. Local school districts receive property tax dollars that go towards providing quality public education for our communities’ children. The remaining 19 percent goes to the state, for additional support to K-12 schools, as well as support for Montana’s universities and colleges.
Additionally, Montana voters across the state had a number of proposals to provide additional property taxes to ensure our local schools can provide quality education for Montana’s children. Voters in the communities of Missoula, Frenchtown, Bozeman, and Belgrade endorsed school bonds or levies to help renovate aging facilities, representing about $183 million investment in Montana’s children.
Our public schools play a critical role in our communities across the state, providing our children with the strong start they need. Congratulations to those districts that saw the support they needed to help improve the lives of children.