NEWS

HB 3 defeat costs Great Falls schools $600,000

Kristen Cates
GreatFalls
Great Falls Public Schools Superintendent Tammy Lacey said the most extreme situation from the failure of House Bill 3 would be to cut school short a couple of days this year

For the first time in what some believe is at least a couple of decades, the Montana House of Representatives failed to pass a supplemental appropriations bill, which could have an immediate impact on Montana schools, along with other state entities.

If finalized, the failure of the House to pass House Bill 3 on Monday could mean Great Falls Public Schools will have to fill a $600,000 budget shortfall, not in the next budget cycle but by the end of June, and could have to resort to some drastic measures to do so.

"I'm not panicking yet," Great Falls Superintendent Tammy Lacey said. "I have faith in the Legislature."

Schools across Montana stand to lose $9 million, according to the bill text and the Office of Public Instruction, but they won't be the only ones impacted if the $31 million in supplemental appropriations from HB 3 aren't addressed. The Montana Department of Corrections will lose $7 million and the Department of Justice will lose $1.7 million, along with other entities that depend on the bill to backfill low-budget estimates made in the prior biennium.

Madalyn Quinlan, chief of staff for OPI, said during each legislative session the state estimates where they think enrollment will be and what sort of revenue will come from school trust lands over the course of the biennium. If the estimates are higher than what revenue actually came through, HB 3 authorizes that money to be redistributed. But if the estimates were conservative, then HB 3 is set to kick in to cover the costs not addressed in the budget.

Quinlan, who has worked at OPI for 30 years, said she can't recall a time when HB 3 wasn't authorized and said it has never really been a partisan issue in the past.

"I don't believe there's ever been a time when HB 3 hasn't passed," she said.

OPI sent a spreadsheet to schools across the state on Monday explaining how much of a shortfall they should anticipate. Lacey said $600,000 is a lot of money to come up with between now and the end of June.

"There are some options that are being floated right now," she said.

The district could take from its reserves, though Lacey said the district is already dipping into its reserves. The most extreme situation would be to cut school short a couple of days this year, which would mean working with the local unions to get an agreement in place for a furlough for those two days.

"That — in my mind — is a last-ditch effort," Lacey said.

Ballance

But Rep. Nancy Ballance, R-Hamilton, said it's premature to warn schools about what this may cost them.

"The budget is not complete," Ballance said. "I think that somebody is making this a political issue."

As chairwoman of the House appropriations committee, she said there were some concerns committee members and party members had about HB 3 as it relates to the budget authority the 2013 Legislature gave to Democratic Gov. Steve Bullock.

"Last session we increased the budget significantly," Ballance said.

This included passing Senate Bill 410, which authorized Bullock to disperse $14 million to $15 million in discretionary funds to nine specific agencies, as outlined in the 2013 session and now Montana law. However, Ballance said, House appropriations committee members this session were disturbed by a 2014 audit, which showed the governor's office misappropriated more than $1 million to state agencies not authorized by SB 410.

"We kind of had a dilemma," Ballance said.

The 2014 audit report includes $465,000 transferred to the Montana Department of Justice, $50,652 to OPI, and $625,000 to the Office of the Public Defender. In the legislative audit report, the governor's office responded that it is not restricted to funding only those agencies specifically designated through the passage of SB 410. But the legislative audit division disagreed.

Ballance said the idea behind giving the governor that budget authority in 2013 was to avoid a special session or a supplemental appropriations bill (HB 3) this session to cover costs.

The governor's office maintains that while SB 410 didn't authorize the governor to move around the funds allocated through the bill, other laws and statutes do allow for such measures. Budget Director Dan Villa argues that there were needs in 2013 that went unaddressed, like providing for drug enforcement agents in eastern Montana, which is why additional funds were giving to the DOJ.

"The end-of-session negotiations in 2013 did not fund the needs of the state of Montana," Villa said. "For Representatives Ballance and (Rep. Ryan) Osmundson to assert that we should cut school funding this year or to release offenders from correctional facilities because the governor funded drug investigators in eastern Montana is ludicrous."

Though Ballance claims that this is being turned into a political issue by people other than politicians, education advocates are concerned that schools and other state agencies are caught in the middle.

Lance Melton, executive director the Montana School Boards Association

"This is one of those high-stakes battles between the Legislature and the governor and we're caught in the middle," said Lance Melton, executive director of the Montana School Boards Association. "I'm hoping common sense will prevail."

Melton said this will put local school districts in a position where they have to lean on local taxpayers to make up the difference in state funding more than they already do to make up their budgets. He's heard there might be some changes to House Bill 2 — the budget bill for the next biennium — to accommodate the loss of House Bill 3. But it's a dicey situation to tie the $31 million in supplemental appropriations, which are usually not a partisan issue, to a bill that is very partisan.

"I'm cautiously optimistic this will get resolved. If they don't I think the chance of a special session just went way up," Melton said. "I hope the powers that be figure out a solution that doesn't pinch schools in the middle."

Reach Tribune Staff Writer Kristen Cates at 791-1463. Follow her on Twitter @GFTrib_KCates.