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Montana Lawmakers Fail To Reach an Agreement on School Finance

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Montana lawmakers will have 11 days in June in which to devise a plan to comply with a state supreme court decision that struck down the school-finance system.

The legislature's regular session ended on April 21 without an agreement on how to equalize spending among the state's school districts. Legislators will return to Helena for a special session that begins June 19, less than two weeks before the high court's July 1 deadline for the approval of a new funding scheme.

Although the Democratic-controlled House and Republican-dominated Senate remain divided over how to raise revenues for a new system, state officials say they are con4fident a pact will be reached during the special session, which is to be devoted exclusively to school finance.

State Chief Optimistic

"I am optimistic that with only one major issue to focus on, all 150 legislators will be able to better understand the problem and a solution can be found," said Nancy Keenan, the state school superintendent.

Representative Ray Peck, chairman of the House select committee on education, added that the road to compromise could be smoothed if House and Senate leaders back a plan to create interim joint committees on education and taxation.

"We could go in and out in a week's time if the interim committees are able to work out a deal," he said.

Gov. Stanley Stephens, a Republican, plans to meet with leaders of both chambers during the next two months and will draft a proposal to present to the legislature, said Victor Bjornberg, Mr. Stephens' press secretary.

Ms. Keenan said the education community also will use the two-month period to regroup. The "education forum will go back [to the legislature] with much the same agenda" that it advocated during the regular session, she added.

Court's Ruling

The state high court ruled unanimously in February that Montana's current school-aid system forces so heavy a reliance on locally approved property-tax levies that students inel10lpoorer districts are denied equal educational opportunity. In an unprecedented move, Chief Justice Jean A. Turnage announced the court's decision during a joint session of the legislature. (See Education Week, Feb. 15, 1989.)

According to Ms. Keenan, the problem during the regular session "was not with equalization so much as with how to fund it."

Democratic lawmakers supported increasing the statewide property tax from 45 to 100 mills. But Governor Stephens, with support from Senate Republicans, vowed to veto any legislation that would have raised the tax rate above 85 mills.

The House bill also would have required the state to cover 90 percent of districts' expenses; set spending limits in wealthy districts; and fi4nanced teacher retirement through a separate fund.

Sales Tax Considered

Governor Stephens supports the implementation of a state sales tax, arguing that it offers the only hope for an "ongoing revenue source that would be more than just a Band-Aid," said Mr. Bjornberg.

Legislative support for a sales tax is questionable, however. During the regular session, for example, Senate Republicans blocked Democrats from bringing a sales-tax bill to the chamber's floor.

Education officials said other tax and cost-savings options being considered include a gross-receipts tax on business, consolidation of school districts, and the implementation of a statewide salary schedule for teachers.

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