Clarifying Misinformation In MTSBA's Update Regarding 95 Mills

Dear Editor,

Montana School Board's Association Executive Director has issued a memo to his membership on the 95-mill issue. It appears he is looking to garner support for the administration to litigate this issue (asking for the Department of Revenue or the Governor to seek injunctive relief), and he makes a few statements that need corrections.

First, counties have been given the calculated levy authority BY THE DEPARTMENT OF REVENUE indicating the current levy authority is 77.89 mills. That is indisputable. The law requires the Department of Revenue to perform that calculation each year, because the mills "are subject to 15.10.420" and the result of that calculation, this year, is a levy authority of 77.89. The levy authority is not 95 mills this year, and Mr. Melton cannot continue to say otherwise.

Secondly, he impugns the integrity of his membership and the role of the Board of County Commissioners when he states, "If the counties can simply disregard a calculation of another governmental entity that is referenced in law and decide on their own how many mills they will impose, what's to stop them at the 95 mills?" The Department of Revenue has performed the calculation and provided the calculation to Montana counties. That total is 77.89 mills. Montana counties have asked, in writing, under whose authority is the State requesting that each county levy above the stated levy authority for this year, and no county has received a response. None. The levy authority this year for the state equalization mills is 77.89 mills.

He is correct that the reduction in mills, if the county levies only what the current mill levy authority calculated by the Department of Revenue is, will result in a decrease of approximately $80 million dollars to the State General Fund. Please be aware that the adopted budget offered by the Legislature and signed by the Governor estimated a State of Montana General Fund ending fund balance of $638.3 million in fiscal year 2024 and $525 million in fiscal year 2025. The updated revenue projections show that they are on pace to exceed those estimates. When Mr. Melton insinuates that the reduction in property tax revenue will impact school funding, he is wrong. School funding and the formula to determine school funding is already set. The State of Montana is on pace to generate over $600 million in excess cash reserves this fiscal year. The reduction in property tax revenue resulting from counties levying the current mill levy authority established by the Department of Revenue will simply require an adjustment to the revenue projections and may result in a decrease in the estimated General Fund ending balance. No school will be impacted. No property taxpayer will make up the difference. When Mr. Melton states otherwise, he is wrong. [See the document from the Montana Taxpayers Association, which specifically proves the 95 mills don't go to the schools, and the State has a large projected ending fund balance-page 3, but we encourage reading the newsletter in its entirety.]

The Department of Revenue has submitted a form letter telling counties they may levy 95 mills for school equalization. The Department of Revenue provided documentation on their calculation of the current mill levy authority, established at 77.89 mills. No one has provided any justification, authority, or explanation for how a Board of County Commissioners can levy 95 mills. Absent the state proving it has authority-and further, who has that authority-to levy an amount different than the calculation, the responsibility to follow the law now falls on the counties and again, saying any of this impacts school funding is wrong.

Respectfully,

Eric Bryson, Executive Director

Montana Association of Counties

Editor's Note: See the article "Valley County Commissioners Vote To Reduce Amount of Mills Levied on Valley County Residents" on how the Valley County Commissioners are responding.