There’s an election underway with big implications for Missoula County Public Schools’ budget as well as the makeup of the district’s board of trustees.
Ballots were mailed April 17, and they’re due this coming Tuesday, May 7 (at this point they must be dropped off, not mailed in, and there’s no in-person voting on Election Day!). If you’re like us, your ballot’s still sitting on the kitchen table. And maybe you’re not quite sure what the four levies on the ballot are all about, or which two board trustee candidates to vote for.
Because we at The Pulp haven’t covered the election and what’s at stake, we thought the least we could do is share—and transcribe—MCAT’s recent sit-down with MCPS Superintendent Micah Hill. MCAT’s Joel Baird and Hill talked through the factors that’ve led to the district’s $3.4 million budget deficit, what the ballot levies would pay for, and how they’d affect property taxes.
Baird also conducted (and posted to YouTube) interviews with the four MCPS Board of Trustees candidates—Tina Eblen, Karl W. Schmitz, Melodie Velasco Stegner, and Jenny Walsh—two of whom will be elected to three-year terms. (Find the Missoulian’s Q&As with the candidates here.)
Baird and Hill discussed at length how the levies would impact our property tax bills. For specifics, see MCPS’s breakdown of the General Fund Levies and the Student Safety and Security Building Reserve Levies, as well as this FAQ.
So watch, read up and don’t forget to drop off your ballot on Tuesday. All of the drop-off locations are listed here.
Take it away, Joel.
This interview has been lightly edited for clarity.
Joel Baird: What is the financial challenge? What’s going on? A question that has come up quite a bit in the comments we saw on the Facebook video is, Well, jeepers, why don’t people know what’s going on? Why is this sudden news to us?
MCPS Superintendent Micah Hill: I think the challenges for school districts—and Missoula’s not unique—that are facing deficits is really three parts. The first part is what we refer to as ESSER funding. That was funding that was given to school districts based on the socioeconomic population of your school district, and Missoula County Public Schools received about $34 million. That was to prepare, prevent and respond to Covid. And so when the pandemic hit, we had a large number of students who suddenly exited our schools. People didn’t feel safe, didn’t feel comfortable, and we saw a decline in enrollment. While we hoped that those students would be coming back to our school district, that never really materialized. And so we held onto staffing and we added additional staffing using those ESSER funds. So we had positions, like behavior interventionist, we added hours and time for our nurses. We included art teachers. So just a variety of positions that we were able to bolster what we offer in Missoula schools.
The money came from the federal government—ESSER—was an emergency response to COVID. What are we going to do to hold kids and teachers together in this trying time?
Exactly. The Board of Trustees for Missoula decided to spend about 95 percent of that on salary and benefits for employees. So people who helped reduce our class sizes so we could spread students out, people who provided academic and behavior intervention for students as they came back from basically not being in school. How do we continue to support them, and how do we address the learning gap? Those kinds of things. So that’s one component. Now it’s about $5 million for this year, and those funds go away and there’s nothing to replace it.
Because the feds say, Well, Covid is over. It’s not over but it’s not the problem that was years ago.
Yeah, so that goes away. We had four years of that. And so if I were a parent with a young child who started kindergarten at MCPS, and now they’re in fourth or fifth grade, I haven’t known any different, I just wasn’t aware of what was going on. I just knew that my kids had art every day, and knew that there were behavior interventionists and academic interventionists, and now those have gone away. So that’s problem No. 1.
Problem No. 2 I talked a little bit about and that’s declining enrollment. Since 2019, our elementary district has seen a decline of almost 500 students. And a major component of school funding is what we refer to as ANB, “average number belonging.” And so we do an enrollment count in October and we do an enrollment count in February, and we average those two numbers together. Each student represents about $6,500 worth of funding from the state. So if you take $6,500, multiply it by 500 students, you’re talking $3.4 million of budget deficit moving forward. And it’s not like we lost those students overnight. It wasn’t just like suddenly they disappeared. This has been an ongoing problem. We’re looking at new students coming into the district, looking at kindergarten, we’re looking at birth rates, those kinds of things. So we’ve just lost that over time. But we’ve held on to the staffing. And so now we have to essentially right-size the district. We’re trying to make our staffing more representative of what our accreditation standards are.
On enrollment, it’s not that there was a pandemic and parents said, Well, I’m not sending my kid to school and I’m done with it. Part of it was the movement within the city or county, and part of it would be those kids aged into a different middle school.
So at the same time that we saw declining enrollment in the elementary—when we peaked in 2021—we’ve seen those students now matriculate into the high school area, and so our enrollments at the high schools have actually gone up, but the elementary have gone down. We’ve also had situations where our special education population has grown during that same amount of time, where we went from roughly 12 percent of our population receiving special services to moving closer to 17 or 18 percent. So it’s declining enrollments but an increased population that needs more services until we’ve had to add in services for those students. We’ve also seen an increase in refugee families, students who speak English as a second language or don’t speak English at all. So we’ve had a lot of these things that we’ve tried to bolster support for within our community. We just see that as being a component of it.
So you have the loss of ESSER funding, and then you have the declining enrollment. And then the last piece that’s really been impactful for us is just the inflation. So the state says for this next year, you get a 3 percent inflationary increase. And so the inflationary increase for school districts—much like city governments and county government—is capped. There’s a law that says, Here’s how we’re going to figure out what that is. This is the most it’s ever been. In years previous, we’ve seen inflationary increases of less than 1 percent.
But what we know as taxpayers, as families who live in this community, is that we’ve experienced more than 3 percent inflation. Look at the cost of eggs, milk, bread, gas, property taxes, paint, lumber, you name it. The price of everything has gone up. And that’s same and true for public schools, where we’ve seen inflationary increases in our property and liability insurance just go through the roof. It’s up almost 100 percent from five years ago.
Yeah, insurance really took a hit. If somebody is a homeowner, or has renter’s insurance or something, they’ve noticed that insurance rates really have gone up dramatically.
Part of that is the evaluation that we get. We belong to an a pooled insurance group, and they come in and they say, Well, five years ago, the cost to replace this building was (I’ll just use a random number) $5 million, and today the cost to replace that building is $10 million. It’s doubled. So we have to make sure that we cover our losses should something happen. And so we’ve seen these really big increases.
Another area where we’ve seen just really big increases is in utilities—electric gas, water, sewer. We have to pay all those same bills that everybody else does, and we manage 20 different buildings just in MCPS. And they’re large buildings, and they cost a lot of money to run.
So when you look at a budget, 90 percent of our budget is encapsulated in salary and benefits, meaning we’re in a people business. We pay people to educate kids and take care of kids. And the other 10 percent are the things we’re talking about—the insurance, the utilities, paper, books, all those things that have gone up in price. But when those things go up—and I’ll just use an example—if electricity went up $190,000 for the district, those are must-haves, we have to have those. If I take that away, we can’t operate our schools. So where do I find that extra $190,000 that isn’t budgeted for? I have to go into my staff. There’s no other place to go to recoup.
Right. And to explain to people the funding—because you’ve made several references to this—the money is coming from the state. So people pay their property tax in the county, but it actually goes to Helena. And then it’s reapportioned back from whence it had come.
Exactly. … The state will say we’re going to tell you what your maximum budget is as a school district and it’s based on your enrollments. So if your enrollments go down, your maximum budget can go down. But the state also says we’re only going to fund 80 percent of that maximum budget. If you want anything above a basic education in your community, you have to go to your taxpayers and they have to approve what we call operational levies. So if you want things like art and music and foreign language and things that aren’t necessarily required for graduation—even activities and athletics—any of those kinds of things, your community has to say, Yes, we support that. And I think that’s one of the best things about Missoula is that our community has overwhelmingly supported these operational levies, year after year. They’ve also supported bonds, which are different. Bonds can only be spent on buildings. So we have to make up that other 20 percent in operational levies. So if our budgets go up a little bit, then we’re coming back to our taxpayers every year to say, We want to stay at 100 percent funding, and would you please support that.
I hope people could follow that somewhat: That the money goes to the state, then the state has requirements for graduation. At the state level, what students ought to know to get a diploma is determined, and at the state level what the basic operating budget of each school district is is also determined. And it’s not as insidious as it may sound—it’s a way of trying to make sure everyone in the state is getting a certain level of education.
Yeah, exactly. So you have this 80 percent that the state funds. A great example in Missoula is that a state diploma, you need 20 credits to graduate. Missoula County Public Schools, you need 24 credits to graduate. So we have requirements above and beyond. In order for us to say we want our kids to be competitive worldwide, to sit at any table with anybody else, elbow to elbow and say, I am a qualified student for workforce, for the military, for college—whatever it may be after high school. That’s the requirement that our trustees have put in place and said, This is what we expect from our students. So just that in and of itself is an additional burden to the budget. So not a bad thing.
So specifically, there are levies that Missoula County voters are being asked to vote upon. And the ballots are due May 7. Do you want explain a little bit about what the school district is asking?
The district is asking for two levies. One levy is the operational levy, which I talked about. That’s that other 20 percent. On the elementary side, it’s about a $105,000 ask, so that represents I think about a 79-cent-a-year increase in property taxes per $100,000 of assessed value. So one of the things I think that sometimes is missed in how complicated school funding and the formulas are, is that your taxes are based on your assessed tax value by the state, not on the market value. So if someone says, Well, I have a million-dollar home, so I’m going to multiply 100…
…times 10. Now they want to $79 from me.
Yeah, and that’s not the reality. The house is actually assessed much lower than the market value. So that’s one thing that we always try and clarify for people. And then on the high school side, the operational levy is about $400,000. Again, we’ve had growing enrollment in our high schools, and so this just reflects that we’re continuing to grow and that we’ve had to add staffing and do some of those things. That’s around $400,000. It’s $1.65 a year per $100,000. … So $1.65 divided by 12—we’re talking 34 cents a month. So it’s that’s not a huge ask, because that $400,000 is spread out over the entire Missoula County Public School boundary, not just the elementary boundary. So that’s the first vevy.
The second levy—and probably the one that we’re most concerned about, and the one that maybe people are less aware of—is what is referred to as a safety levy. So in school funding, the state has said, in a couple of different areas, we recognize that school districts, we’re competing for budget dollars for things that maybe weren’t once considered when we initially said here’s how the funding formula works. A great example of that is technology. We we’ve been around it for, you know, 30, 40 years. Computers, all those kind of things. It’s growing. And so taxpayers about 10 years ago supported a technology levy for the school district. And so we were able to, instead of spending general fund dollars that usually go to salaries and benefits and supplies, we’re able to pull that away and say we’re going to support technology with these dollars. A safety levy is very similar. Right now we estimate that Missoula County Public Schools spends anywhere from $3.5 to $4 million a year on safety-related expenses. That includes our school resource officers, it includes the physical components of a school—our secure entries, our visitor check-in systems, fencing, glass, doors, locks, camera systems, all of those things. Anything that’s safety related. So what we’re asking our voters to do is to help us offset those general fund expenditures. Right now we pay for them out of the general fund, and that competes for the same dollars that we’re trying to pay classroom teachers with, interventionists, those things. And now we’re asking, Put it in the safety levy for us, and let’s support it that way.
So on the elementary side, we’re asking for $1.5 million in that levy. And then on the high school side, it’s a $1 million. So out of a $4 million expense, we’re asking our taxpayers to support about $2.5 million dollars of that.
One would hope that the safety levy would really show that people care about safety in the schools. It is a very lamentable trend. If you were to say to someone 50 years ago that this was an issue they would be scratching their heads. And so these are larger requests. The cost for the safety levy $11.24 a year per $100,000 in assessed property tax value. That’s the elementary one. And for the high school one, it’s $4.08 per $100,000 in assessed property value. Bearing in mind that it’s not like what they’ll find on Zillow or some other assessments of what your property be worth, rather the state assessment, which is often half.
So one thing to do, if you really wanted to calculate what would this actually cost me if I’m voting yes, go to your tax statement and look up your assessed tax value on your home, and then you can do the math on that. When we put out the ballots it’ll actually say the amount based on $100,000—which we know there’s not $100,000 assessed value in Missoula—so $100,000, $300,000 and $600,000. So getting us closer into the ballpark.
I saw we had a question here. We’ve heard a lot about the 95 mills in the media. Could you explain that?
This was something that came up very early, right after we everybody got their new property tax evaluations. The Association of Counties got together and said, Whoa, whoa, whoa, wait a minute. This state is sitting on a surplus, and yet they continue to levy 95 mills. School districts, when we levy, we actually levy to a dollar amount. We don’t levy to mills. And so this 95 mills the state levied against all the counties in Montana. And if you look on your tax statement, it usually says something about tax equalization for schools or something along those lines.
Right—the idea that the poor districts would have a chance because they’re sharing with the better-off districts.
Exactly. The counties calculated that for the state to get the exact same amount of money as last year for this year, based on these new values, they would only need to levy 77.8 mills. The state and then the counties got into a legal dispute over what’s right, and the Supreme Court said it’s the 95 mills.
And so the state got this windfall of money that will ultimately come back to schools to be redistributed and equalized across the state, meeting that mandate for equity and state funding for schools. But there’s a misnomer that these 95 mills meant that the school districts got a windfall of money. Wait a minute. I looked at my tax statement. My property taxes went up 40 percent, and you’re asking for more money. I just gave you more money.
And the answer is no, we did not get a windfall. In fact, over all the budgeted funds in our elementary district, we got $50,000 less from the state last year than we did this year. The high school got a little bit more, but overall, we got less money from the state and more money from local taxpayers went into paying for our schools. And that’s what breeds that frustration and that tax fatigue. And what we’re hoping to make clear for our voters and clear for our community, is that we aren’t coming to you asking for something that isn’t needed. We take our fiscal responsibility for providing for our students very seriously. We have had to make tremendous cuts in our school district to balance our budget. We have pink-slipped all of our non-tenured employees. We may be in a position where we’re [losing] additional employees. These levies will actually help support some of those positions. But we will still end up having cut roughly 100 positions out of MCPS.
That’s got to be very hard to do. And the levies are very specific. … It does look like a lot of time and effort went into formulating what the needs are.
Yeah, and in our district we work with a budget and levy committee that’s made up of school board members, administrators, representatives from our unions, and we have to come to consensus on what we’re going to do without moving forward knowing that we can’t cover it all, that we can’t come to our taxpayers and ask for more. And I think that probably the bigger challenge for us is just, how do we communicate to our state legislators that this is a real challenge, and how do we not make this so impactful for school districts? I mentioned early on that we’re not alone. Billings, Helena, Kalispell, Bozeman—everybody is cutting millions of dollars out of their budgets. And it doesn’t take into account the cost of living. Missoula is an expensive place to live. Bozeman is an expensive place. Kalispell. So when we’re trying to provide salaries and benefits for our staff, you can’t cut it in these communities anymore. We’ve been out-priced.
Well, let’s mention where people could go for more information if you want to learn more. It’s not as grim as it might sound. But it’s a problem that needs to be taken care of.
The sky is not falling. I don’t want to project that. But we are having to make significant reductions. We’re talking about reduced programs and services for our students, things that our community has come to value and love. And it’s complicated.
Thank you so much for taking the time to explain this. And is there anything that we didn’t cover you want to add?
We want people to be informed voters, and we want them to understand what the purpose of the levies are, what they actually fund. And, you know, again, I can advocate for Yes. We see this as critical. We would not come to our taxpayers, knowing the fatigue, knowing the conversations that are happening in our community. And so we’re just hopeful.
