Education Funding

Lawsuit Claims Montana School Finance System Is Unfair

By Julie Blair — June 13, 2001 2 min read
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Two Montana school district trustees have filed a lawsuit contending that the state’s method of financing K-12 schools violates the state constitution.

Montana sets school budgets, agrees to pay for a portion of those expenses, then requires state residents to pay for the rest through property taxes, said Conrad F. Stroebe, a plaintiff and a school trustee for Billings School District 2.

Such a formula is unfair, given the differences in property values throughout the state, he argued, because some taxpayers are forced to levy bigger tax hikes than their family and friends in other communities must pay.

“We’re discriminating against taxpayers based on where they live,” said Mr. Stroebe, whose co-plaintiff is his wife, Teresa M. Stroebe, who is a school trustee for Lockwood School District 26, which is in the Billings suburb of Lockwood.

The 8-year-old finance formula violates the equal-protection clause, the due-process clause, the uniform-taxation doctrine, and the tax-equalization clause of the Montana Constitution, says the lawsuit, which was filed May 24 in the Montana First Judicial District Court in Lewis & Clark County.

Moreover, the suit claims the state owes back taxes to its citizens—an amount that Mr. Stroebe calculates to be around $1 billion.

The State Responds

Despite the claims made in the lawsuit, state officials believe the current funding system is fair, and they plan to make that argument in court.

“We think there’s a rational basis for the state’s approach to education funding as they have it,” said Chris D. Tweeten, a lawyer who will represent the state in the case. “As long as there are counties, and as long as there are property taxes, taxpayers will be charged different amounts for services. That’s unavoidable.”

This is not the first time Montana’s school finance system has come under fire, noted Jeffrey A. Weldon, the chief legal counsel for the state education department.

For the past 15 years, lawsuits challenging the formula have been submitted, the most recent resulting in an overhaul of the system as mandated by the state’s highest court, Mr. Weldon said. That directive resulted in the current system, implemented in 1993.

But none of the previous lawsuits dealt with the issue of tax equity, said Eric Feaver, the president of the 16,000-member MEA-MFT, the state teachers’ union.

“The court will probably say it is the wrong way to do things and direct the legislature to do something about it,” Mr. Feaver said. “I don’t have faith the legislature will come up with a positive solution.”

Mr. Feaver said he worries that state lawmakers’ response would be to further cap the amount local communities can spend on schools. Instead, the state desperately needs to increase revenues, he argued.

The lawsuit “will carry us even further toward a greater loss in our capacity to actually provide programs and opportunities,” the union leader predicted.

Mr. Stroebe, however, said that he had no other alternative than to file a lawsuit.

“We’ve tried for years and years and years to come up with a legislative or executive decision in support for this,” he said, “and we’ve come to the conclusion that the solution is not going to come from legislators or the governor of Montana.”

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A version of this article appeared in the June 13, 2001 edition of Education Week as Lawsuit Claims Montana School Finance System Is Unfair

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