The Public School Funding Problem

Montana's public education system has a problem: increased school funding has not translated into better outcomes for students.

Montana’s public education system has a problem: increased school funding has not translated into better outcomes for students. Reading and math scores have declined for the last decade while school funding is up 36%, slightly outpacing inflation. Public school enrollment has stayed mostly flat, meaning schools have more resources per student than ever before.

What’s going on here? I see three main issues. First, our public school funding system lacks clear accountability mechanisms. Second, we have an extremely complex school-centered funding model that isn’t responsive to students and families. Third, we worsen disparities by assigning kids to their local school based solely on their residential address.

In regard to accountability, let’s follow where the money injected into the school system has been going. From 2017 to 2023, the share of funding spent on facilities increased by a whopping 58.9% and administration increased 4.7%, while the share being spent on instruction actually decreased by 6.1% and student services declined by 9.1%. Schools are directing less of their total funding towards high quality instruction in the classroom and more towards serving administration and overhead. Teachers, especially our starting teachers, are not receiving funding priority.

It’s clear that public schools need additional incentives to prioritize investing in high quality instruction to improve student outcomes. We should pass and expand the use of performance-reward funding models like this legislative session’s STARS Act, which rewards schools for raising starting teacher pay and otherwise investing in quality instruction. Under the STARS model, if schools don’t deliver results, they don’t get the additional funding. This is a much better funding design than the status quo of simply handing over additional funding to schools while nothing changes.

Next, the complexity of our school funding system needs addressed. Funding complexity is currently driven by two dynamics: Montana’s Constitution, which mandates that public schools be funded “equitably“, coupled with the fact that public schools are funded significantly by local property taxes levied by the local district. These two dynamics require extremely complicated and imperfect formulas to maintain funding equalization as students move between schools or as property values in school districts fluctuate.

School funding complexity reduces transparency for the taxpayer and is also a huge impediment to allowing funding to follow students as families exercise choice seeking schools to better accommodate their needs. As one recent columnist pointed out, this dynamic has been especially painful for families in Big Sky whose taxes fund the Ennis School district, a school their students don’t even use. When a school district faces property tax hikes if a student moves to another school, it pits communities against each other instead of focusing on supporting students.

We need to move away from this complex school-centered funding model to a statewide student-centered funding model for public schools. This would enable money to freely and simply follow students between schools and also make constitutionally mandated equalization easier. This legislative session, HB 156 and HB 483 take positive steps towards this solution by substituting local district property tax levies for county and statewide levies respectively, but we should go farther.

Ultimately, we should aim for ending address discrimination, the policy of assigning children to schools based on where their family lives, which widens economic disparities and even criminalizes parents who falsify their address to get their kids into a good public school.

Instead, Montana should embrace a system of true statewide open enrollment supported by a student-centered funding model, where funding is tied to the student and follows them to whatever public school they choose, while schools must compete for students as they would in any free market.

This column originally appeared in Lee Newspapers.