School spending is a crucial issue for students, families, and taxpayers who expect their money to be used effectively. Montana law mandates a review of the school funding formula every 10 years. That review starts now. Under Section 20-9-309, MCA, the Legislature must conduct a comprehensive study to determine the most effective way to fund Montana’s public education system. This includes considering factors such as student demographics, rural-urban differences, special-needs and American Indian students, and access to qualified educators.
The Legislature’s goal is clear: identify the real costs of education, ensure a formula complies with all laws, promotes equity, and improves flexibility, accountability, and efficiency.
In support, the Montana School Boards Association, in collaboration with Matt and Trish Schreiber of the EP Promise Foundation, hosted Dr. Marguerite Roza of Georgetown University’s Edunomics Lab. Nearly 100 policymakers, educators, and community members attended her presentation. The overall takeaway was positive, reaffirming that Montana’s schools are delivering strong results. Although Math and Reading scores declined after COVID-19, the drop wasn’t significant. Montana continues to achieve more with less, keeping pace with inflation since 2013 by leveraging federal ESSER funds to offset impact of the 3% school-funding cap.
Montana NAEP scores are among the best in the nation.
Math:
• 4th grade – 238; National – 237
• 8th grade – 279; National – 272 (significantly higher)
Reading:
• 4th grade – 217; National – 214 (significantly higher)
• 8th grade – 261; National – 257 (significantly higher)
Montana achieves these results cost-effectively, spending $1.5 billion less than Massachusetts, $1 billion less than Alaska, $895 million less than Wyoming, and $404 million less than North Dakota.
Individual Montana schools often outperform, despite a higher proportion of low-income students and fewer public dollars. Notably, outcomes for students with disabilities are also improving. While they still lag behind their general peers, the Reading gap is smaller. They score above national averages for special-needs students on both tests.
Dr. Roza listed various combinations of states’ funding sources: taxes on sales, income, and local property. These revenues support mostly hybrid formulas that blend student-based, staffing-based, and program-based models. She stressed that a formula should be transparent, equitable, financially sustainable, and flexible. Flexibility was a recurring theme.
Dr. Roza also portrayed how individual districts allocate funds. For instance, a school in South Carolina offered families a $25 gift certificate for their child’s perfect weekly attendance, an annual expenditure of over $1 million. Another district offers teachers $10,000 for summer school. Another pays classroom teachers $2,000 extra for each student over the state cap. These examples show how districts target specific outcomes, but don’t directly address the structure of Montana’s current funding formula.
What’s more promising for Montana is legislation with statewide impact, including the STARS Act (increased starting teacher pay), HB515 (streamlined funding for facilities and technology), and HB567 (adoption of countywide resource-sharing agreements). These kinds of measures could shape a more adaptable formula.
During discussion, participants noted that Montana’s teacher shortage is not “over,” despite national trends. High costs and insufficient housing make recruitment particularly difficult in certain areas. Furthermore, Montana’s enrollment disparities are more pronounced: some schools serve fewer than a dozen students, while others, like Billings West High School, serve over 2,000.
Dr. Roza’s final takeaway: Funding formulas must be flexible. Schools succeed when (1) relationships are strong, (2) there is local ownership, (3) school boards make thoughtful trade-offs when allocating funds, and (4) boards are careful stewards.
As Montana begins its decennial review, policymakers and local communities must prioritize both flexibility and accountability. The future of the state’s education system depends on Montana’s ability to adapt to the diverse needs of all students while upholding fiscal responsibility.
Krystal Zentner is Montana School Boards Association (MTSBA) President and Bridger Public Schools Trustee; Rick Cummings is MTSBA President-Elect and Cascade Public Schools Trustee; Jennifer Hoffman is MTSBA Vice President and Billings Public Schools Trustee; Sue Corrigan is MTSBA Immediate Past President and Kalispell Public Schools Trustee.