School superintendents and trustees from five counties along with legislators met at Sidney High School last week to review proposed bills and prepare for an upcoming legislative session that could turn ugly in a hurry. 

 

The bills

As educators learned Wednesday, there are three relatively simple bills that would help oil and gas schools. The first allows school districts to keep 150 percent of the oil and gas revenue over the base budget. 

Under Senate Bill 329, districts can only retain 130 percent. The second holds districts to estimate 25 percent of the oil and gas in their base budgets, rather than increasing it by 10 percent each year. 

The third is a SB 329 waiver in which if a school district sees a 5 percent enrollment increase in a year, it’s granted a six-year waiver from the law’s requirements. If it experiences another 5 percent increase the following year, the six-year waiver starts from there, essentially tacking on another year. 

But the big bill – the one that has everyone talking – may take some major persuading to push through both Houses of the Montana Legislature. Known now only as LC 134, primarily sponsored and authored by Sen. Llew Jones, R-Conrad, the proposed education funding bill tries to address both oil and gas issues and statewide issues – a little something for everyone, as it were. 

The bill is two or three inches thick, and as Rep. Austin Knudsen, R-Culbertson, informed the group, there is little chance legislators will read it in its entirety. “To be completely honest with you, I think that bill’s going to have a difficult time, especially if it gets to the house,” he said. “That bill is going to spend an awful lot of money, it’s going to spend an awful lot of new money that we’ll have to find a funding source for.” 

Knudsen said fiscal conservatives will not be warmed to its price tag which is currently estimated in the hundreds of millions. 

Sen.-elect Matt Rosendale, R-Glendive, noted the bill has been steadily progressing for the last 10 months as legislators work to return oil and gas revenue back to eastern Montana to deal with impacts. “As we started the process, Sen. Jones did come around, and he did listen. He did include a lot of the issues that we’re faced with in his entire bill,” he said. “The problem is that he also included everybody’s wish list throughout the state, and that comes up with a very very large price tag.” He called its chances of going through both Houses “very slim” after having spoken with Senate leadership. 

There is some disagreement, however, over the figures. Culbertson School Board trustee Paul Finnicum, an oft outspoken critic of Senate Bill 329, said through his discussions with legislators, the bill would cost $150 million in the next biennium, though $75 million is property tax relief and an additional $34 million are monies the legislature mandated through the inflation index they would’ve had to pay anyway.  

He also supports the one giant bill over smaller pieces of legislation. “Two years ago, we went to the legislature – and the oil and gas community is small, it’s not the whole state, it’s a small part of the state – and how did we do in the last legislative session?” he said. “We got our butts kicked, and that’s what I’m afraid is going to happen again if we piecemeal this out. It’s going to be us against the rest of the world just like it was last time.” If LC 134 is too big, “so be it,” he added. 

 

What oil, gas schools want

For oil and gas schools, administrators seek a funding mechanism that allows districts to respond to immediate impacts – as Sidney Superintendent of Schools Daniel Farr said: “We need the flexibility now.” – whether it be for increased enrollment, funding for competitive salaries, or housing (Sidney had 16 housing developments as of last week). Flex funds help. Some districts, like Sidney, add a $2 an hour impact spike to the classified staff salaries without inflating salaries on the whole. 

Farr said so far this year, his schools have seen 130 new students, and of those 67 percent are from out of state. Fifty-two students are considered homeless and about 20 percent of the new students require special education. “The impact is enormous and it chews up classroom space,” he said. 

 

A brutal session? 

Knudsen doesn’t predict a hostile atmosphere after having spoken with western Montana legislators, including from Missoula, who’ve inquired about what’s needed for eastern Montana to handle the oil development effects. “It’s early, and it’s tough to say, and we don’t know how the session is going to go yet, but right now…I’m pretty optimistic that this east versus west thing isn’t going to be near as bad as it was last session,” he said. 

Education funding is expected to be dealt with and solved early on in the session, rather than the usual tail end of the four-month gathering when lawmakers work long days to meet deadlines. 

State legislators will have their hands full during the season with a $400 million surplus that is reportedly already “spoken for” to pay the state’s bills for the next biennium. Among the big-ticket items is solving the billion-dollar pension deficit. 

Meanwhile, education and the question of how to fund it remains a hot topic, and oil and gas revenue, contributing about 10 percent of the state’s overall income, looks awfully enticing these days. That’s why school administrators in oil and gas country want to be prepared for what may come. 

“From my discussion with leadership, Senate leadership, I’m very very enthusiastic about [the session]. They’re very interested in the problems we have out here. They are very interested in helping us out,” Knudsen said. “I’m cautiously optimistic for this session. I think we’re going to do a lot better.”