Valley County Breaking Direction From Administration Of Governor

Valley County is one of the 49 counties who have chosen to not follow a directive from the administration of Gov. Greg Gianforte by scaling back their collections of a state-level school funding property tax. These 49 counties will levy 77.9 mills of school equalization tax for 2023, as opposed to the full 95 mills ordered by the Montana Department of Revenue. The Montana Association of Counties (MACo) indicates that only Broadwater, Deer Lodge, Glacier, Madison, Meagher, Teton and Toole counties will levy the full amount.

The dispute comes from different interpretations about how a local tax cap law applies to the tax, which produces revenues to help the state balance funding between tax-base rich and tax-base-poor districts. The situation has produce multiple cases pending before the Montana Supreme Court.

One of these lawsuits, was filed last week with the Montana Supreme Court on behalf of MACo’s 56 member counties, seeking to clarify whether the State is subject to the same statute that requires counties to levy fewer mills due to increased property values, which in turn limits their property tax increases. MACo asserts that State is also subject to this law and must adjust their school equalization mill rates accordingly, which would be 77.9 mills this year.

However, no matter the outcome of these lawsuits, the actions will have no impact on school funding for this biennium, which is based on a formula the Legislature approved earlier this year. If the counties’ interpretation of the status is upheld, school funding will remain at the current level determined by the Legislature. Alternatively, if the Court determines the State can levy extra mills, school funding will still remain at the level determined by the Legislature.

The uncertainly has put the Valley County Commissioners in a position where they have to choose whether to collect the lower amount, running the risk that a court order eventually forces them to send a supplemental tax bill or alternatively collect the full 95 mills, which could put them at risk of litigation brought by taxpayers who believe they’re being overcharged.

“We’re kind of between a rock and a hard spot, because we’re just supposed to do what the legislature tells us. We’re not supposed to interpret and all that. From a mechanics standpoint, it’s far easier for us to go 77.9 and then go to 95 if the Supreme Court says this is what we’re supposed to do,” explained Valley County Commissioner Mary Armstrong during a meeting with the Valley County Superintendents on Oct. 24.

All of the Valley County school superintendents met in the Board of County Commissioners on Oct. 24 to discuss what the change in levies would mean for them looking into the future. The Montana Quality Education Coalition, which represents school boards, the state’s teachers union and other education advocates filed suit against counties at the Montana Supreme Court earlier this month. In their lawsuit, education advocates argue that the lower collections would leave a $160 million gap in the two-year education budget approved by this year’s Montana Legislature and asks justices to issue an order requiring counties to collect the full 95 mills. County officials who favor the lower collection level have said they believe the state General Fund, which has been running a surplus in recent years, can readily cover the difference. MACo announced last week that it has filed it’s own lawsuit before the high court. Naming the state and Gianforte’s revenue department as defendants, the lawsuit asks the court to rule that the state can’t legally order the collection of the full 95 mills.

“None of the Commissioners want to have a negative impact on schools,” stressed Commissioner Armstrong.

While these cases are being battled in the courtroom, local Superintendents are having a hard time visualizing the future for their districts.

“My concern is I don’t have a lot of faith of what’s happening with our politicians right now,” stated Hinsdale Superintendent Adam Zopp.

“If the Glasgow School District, or the Hinsdale or Nashua or Frazer or Opheim don’t receive the funding from this piece, we have to go out. We the districts have to go out to the taxpayers and ask for an increase. Without this piece, that becomes scary for us because we do our darnedest to promote and show our Districts where we’re spending the money....And then the community says ‘no you’re not, we’re not going to do that,’ so then we have to reduce our teachers, our paras, all of those pieces. So that becomes scary on our end when it trickles down to us and we have to go back out to our school districts and ask to increase those mills,” stated Glasgow Superintendent Wade Sundby.

Commissioner Paul Tweten acknowledged seeing both sides of the arguments for the 77.9 vs the 95 mills and hopes the legislature will decide the best course of action. “I think for us, it wasn’t so much of a decision of ‘we think this is right versus this.’ It’s,’we don’t know the answer so what do we do while we are getting the answer,” explained Commissioner Armstrong.

As of press time, justices have yet to rule on any of the cases.