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Issue Position: Knowing the Books - Real Revenue in Montana

Issue Position

Location: Unknown

Most people think that all state revenue can be packaged and labeled as "for education" or "for highways" or "for infrastructure," but that just isn't factual. Knowing how state revenues are designated is important for our Land Board members to understand.

Imagine state funding for education as a large pipe that will hold a finite amount of money. That amount designated by the legislature. The first dollars flowing into the pipe are those already available from the school trusts. When the existing school trust money doesn't fill the pipe, the balance is supplemented by general fund tax revenues. What most folks overlook is that when additional dollars are realized as the result of Land Board management decisions they flow into the front end of the funding pipe. As a result, they push an equal number of general fund dollars out of the back end of the pipe. The total revenue available for public school funding remains unchanged during the biennium.

This rather wonkish concept has never been effectively communicated to the people of the state and it is high time that Montana taxpayers are let in on the secret. It is also time to initiate a dialogue about policy changes that will reconcile public perception and fiscal reality.

There are strong indications that Montana public schools face daunting financial challenges with regard to facility improvement in coming years. Rising trust land revenues from development could play an important role in meeting those challenges. A policy allocating a substantial portion of "new" trust land revenue as funding for public education over and above the current budget total is wholly justifiable.

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