Back to School: How are Montana Schools Funded?

By far and away one of the most important investments we can make in our economy is in the future of our youngest learners. Montana is home to over 400 school districts, enrolling 142,000 students – from Missoula to Miles City, from Eureka to Ekalaka. 

But how are these schools funded?  As our students return to the classrooms this month, the Montana Budget and Policy Center will be taking several weeks to explain how our state budget finances our education system. Today, this post will give a quick overview of how our schools are funded. 

As always, a good place to start is with the Montana Constitution.  It states:

“It is the goal of the people to establish a system of education which will develop the full education potential of each person.  Equality of educational opportunity is guaranteed to each person of the state.

The legislature shall provide a basic system of free quality elementary and secondary schools…(and) shall fund and distribute in an equitable manner to the school districts the state share of cost of the basic elementary and secondary school system.”

Where does school funding come from?

Montana schools are funded through a combination of federal, state, and local sources.  For 2010-2011, schools received about 43% of their funding from the state, 25% from local property taxes, 9% from county sources, 10% from non-tax local sources, and 13% from federal sources.  In total, schools received about $967 million from the general fund in 2011-2012. This amount includes the statewide mills (explained by this blog here) as well as the revenues generated from school trust lands (discussed by this blog here).

How is education funding determined? 

The state legislature determines what the overall general fund investment will be for K-12 education, but the state constitution guarantees each child the “equality of educational opportunity.”  What exactly this means has been subject of several court cases, and the legislature has defined “a basic system of free, quality” education and has established a funding formula to provide this quality education to each Montana student.  This formula – which will be the subject of several posts throughout this month – is based on a number of factors, including enrollment, number of educators, and the number of American Indian students. 

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