School leaders attribute budget crises to pandemic funding cliff, state funding frustrations

A wave of major budget cuts is hitting public schools across the state - a situation officials from four of Montana's largest districts attribute to declining enrollment, inflexibilities in the state's school funding formula, and a funding cliff facing schools as pandemic-era federal relief money runs out.

District leaders from the Helena, Great Falls, Bozeman and Missoula public schools, meeting with reporters in Helena Friday, also said increased property values and the rising cost of living in the state are major factors impacting their ability to craft budgets that meet the needs of local students and allow them to recruit and retain educators.

"Whether it's crossing guards, aides, teachers, bus drivers, we're short of staff, and the only way to get more staff is to pay more," Brian Patrick, the budget and operations director for the Great Falls Public School, said Friday. Patrick added that as much as 90% of the district's general fund is already dedicated to staff salaries and benefits.

Many of Montana's large school districts are proposing school closures, salary changes and staff reductions in response to budget shortfalls this year. The Billings Public Schools is reportedly experiencing a $4 million deficit at the elementary level alone. Officials from Great Falls, Bozeman, Helena and Missoula told Montana Free Press Friday that they're similarly looking at deficits of between $1 million and $3 million.

"It's not singular in our own districts," Helena Public Schools Superintendent Rex Weltz said during Friday's media briefing. "We've been able to make ends meet for years under the [state funding] formula, we've found ways to balance our budgets. We're at a tipping point where we're no longer able to do that. We're really struggling."

Among the challenges now facing districts is what Missoula County Public Schools Superintendent Micah Hill called "the ESSER cliff." At the height of the COVID-19 pandemic, Congress passed a trio of bills - commonly referred to collectively as the Elementary and Secondary School Emergency Relief, or ESSER, funds - that injected nearly $500 million in one-time federal dollars into Montana schools. Some districts such as the Great Falls Public Schools chose to invest the funds on one-time expenses such as building upgrades, while others including MCPS used the money in part to hire new positions to help students address pandemic-induced learning and behavioral issues.

The last of those federal funds expire this September, but have created what Weltz called a "new normal" for teachers, students and parents. Hill said that while MCPS was clear with staff regarding the temporary nature of the money and some of the positions it supported, he understands the alarm community members feel about ESSER-related reductions.

"We have students who are now in fifth grade that were in kindergarten and all they've ever known is we've had academic intervention, behavior intervention, extra art teachers, extra support, instructional coaches," Hill said. "That goes away and they're like, 'What's going on? What happened?"

Compounding the expiration of those funds is a significant drop in the number of younger students in schools throughout Montana. According to Montana School Boards Association Executive Director Lance Melton, the share of Montana's population made up of school-aged children has declined by a quarter, from about 20% to about 15%, over the past three decades.

The trend has been a familiar challenge for smaller rural districts, but it's become a significant issue in larger districts as well. Bozeman Public Schools Superintendent Casey Bertram said that elementary enrollment in his district flattened out in recent years. He added the only increases he's seen accompany the explosive growth in the Gallatin Valley have been among high school students and younger multilingual students tied to the construction boom in Big Sky.

"That comes with a variety of support challenges," Bertram said of the latter, "because you have students who need support learning English, may not be literate in their home language. We welcome them with open arms, but it continues to stretch those general fund dollars."

Enrollment is a major factor in local school budget discussions because it is the primary factor used in the Legislature-specified formula that caps the size of school budgets. Hill estimated that the nearly 500-student decline Missoula has experienced in elementary enrollment since 2018 equates to about $3.4 million less in direct state aid for the district.

The school leaders also expressed frustration that the Legislature hasn't increased the school funding formula's per-student rates to account for the rapid inflation that districts and their staff have faced in recent years. Lawmakers stuck to a roughly 3% annual inflationary increase for those payments last session, at a time when consumer inflation was still coming down from an 8% high in 2022. District officials said that decision has made it harder for their districts to meet the rising costs of utilities and insurance and to pay wages that reflect the rising cost of living in Montana communities.

"That impacts every Montana public school regardless of size," Bertram said of the inflationary increase. "When inflation is well above that, you're going in the wrong direction and it's going to be very challenging."

Bertram and the others also noted that the increased financial strain is coming at a time when individual property taxpayers are already feeling their own pocketbooks pinched by rising property tax bills throughout the state - a situation district officials are aware could impact voter support for their own local school levies when ballots go out in May.