Long-term school funding sources worry local officials

By ROGER MORRIS Western News Publisher

As legislators prepare to return to Helena for a special session on school funding, Libby School superintendent Kirby Maki and Libby State Representative Ralph Heinert are concerned where the funds will come from.

Earlier this week, Gov. Brian Schweitzer called for a special session of the Legislature to begin Dec. 14, and unveiled a proposal to spend an additional $64.5 million of state money on schools next year. The announcement followed closely a stalled proposal by the Quality Schools Interim Committee in Helena just before Thanksgiving that educators said was flawed in several areas. It would have increased state funding for schools by $91.8 million boosting the state's share from 60 percent to 66 percent.

Under that plan some districts would see property tax increases while others — including Libby — would have seen a decrease in taxes but an increase ($750,000 to $1 million) in school funding.

Maki contends that according to the state Supreme Court ruling that the state was not adequately funding education, there were not supposed to be losers and winners. He said the committee's plan relied too much on local tax levies.

The governor is proposing:

l $23 million for a Quality Educator Component to help recruit and retain teachers;

l $3 million for an Indian Education for All Component;

l $2.5 million for an At-risk Student Component.

l $1.65 million for Close American Indian Student Achievement Gap;

Schweitzer is also proposing one-time only money to further assist school districts in the following areas:

l $125 million for Teacher's and Public Employee's Retirement for recruitment and retention;

l $25 million for Buildings Operation and Maintenance for a Facility study and weatherization and deferred maintenance;

l $7 million for Indian Education for All;

l $1 million for Energy Costs Relief.

"Even after all that money, where are we going to be and what happens next year?" Maki asks with concern about school district being forced to levy increases. "You give all the teachers $2,000 (under the governor's proposal) more and what happens the next pay year? It compounds itself."

The Libby superintendent is hoping the Legislature takes the governor's plan and meshes it with other proposals for more money.

A proposal from the Office of Public Instruction was seeking to create an all-day kindergarten with full funding. Libby already does an all-day kindergarten but only receives partial funding, Maki said. Under the OPI proposal, Libby schools would receive $150,00 to $175,000 more. Overall, it was looking are providing about $3,000 per teacher to districts.

"That would be a shot in the arm for us," Maki said. "But we need a dependable source of funding for schools."

And the Quality Education Commission, a coalition of rural schools of which Libby is a member, proposed its own school-funding plan that, among other things, called for spending $4,000 per classroom next year.

The governor was proposing to spend $31 million of state money and another $33 million, one time, from the state's surplus estimated to be between $135 million and $300 million by administrative officials.

Maki's concern is so-called state surplus funds will be used this year to solve the problem. He doesn't want the plan to give school districts the go-ahead in year two to increase their local property tax collections to make up that funding.

"We don't want to be beggars but people want to go forward not backward," he continued. "That was the intent of the lawsuit."

Maki said he doesn't know how it's going to turn out, "But it will be interesting. It's frustrating because you get 150 people who mean well but they've got their own concerns, their own interests and it gets complicated."

Heinert shares Maki's concerns but doesn't feel like he can comment until he sees a proposed bill. He's been following the various proposals from OPI, the legislative committee and now the governor.

"Until I really see what's being presented, I don't know how to react," he said.

One thing is evident, there hasn't been much discussion about where the funding is going to come from, said the first-term legislator.

"What may come of this is a temporary infusion of money through the 2007 school year," Heinert said. "While they may be a temporary fix again, we've got to come up with a different funding mechanism. My personal opinion is if we're going to have tourism as our main industry statewide, we need to seriously look at some type of sales tax."

Heinert said during the legislative session earlier this year he voted against sales tax because of a promise he made to the electorate. But he's convinced changes need to be made in the state's tax structure that provides relief for both business owners and residential property owners.

The other issue the Legislature will be considering is bolstering the faltering state retirement systems for teachers, state and local government employees, sheriffs and game wardens. As of July 1, it had a combined potential deficit of $1.46 billion.

That system faltered for several reasons from the stock crash following 9-11 to a boost in pensions by the Legislature in 1999 and 2001 and lack of oversight by a couple of state boards.

Schweitzer wants to take a first step of putting about $125 million into the plans.

Heinert said bulk funds need to be put back into the system but some of the proposals would increase employee's contributions and involve property taxes.

"Personally I think the system needs to be changed to defined contribution rather defined benefit similar to a 401K," he said. "That's where the state doesn't have all the risk but it is shared."

The special session is scheduled to last 4 days but Heinert has doubts everything will be accomplished.

"I think there's going to be some issue that won't get resolved," he said.