Montana Constitution Article X, Section 2

Section 2. Public School Fund. The public school fund of the state shall consist of:

(1) Proceeds from the school lands which have been or may hereafter be granted by the United States,

(2) Lands granted in lieu thereof,

(3) Lands given or granted by any person or corporation under any law or grant of the United States,

(4) All other grants of land or money made from the United States for general educational purposes or without special purpose,

(5) All interests in estates that escheat to the state,

(6) All unclaimed shares and dividends of any corporation incorporated in the state,

(7) All other grants, gifts, devises or bequests made to the state for general educational purposes.

Mont. Const. Art. X, sec. 2 (1972).

History

Late 1800s and Early 1900s

Montana's school districts are primarily supported through local taxes, giving rise to disparities in funding.

Pre-Constitutional Convention of 1972

1864: Montana Territorial Legislative Assembly
The Montana Legislature created the School Fund during the 1864 Montana Territorial Legislative Assembly.

1927: Common School Equalization Fund
The Legislature passed the act devoting a new State common fund. The Act made no change with respect to the types of taxes to be levied, but merely created a new fund to which certain of the taxes would be credited. These taxes include oil production taxes, taxes on mines, and inheritance taxes. State School Taxes and School Funds and Their Apportionment, United States Department of the Interior Bureau of Education Bulletin, Issue No. 29 (1928)State Taxes and Funds.

The Act created the Common School Equalization board and "made it mandatory that the State Board determine the minimum educational program to be equalized. The equalization fund consists of fifty percent of the annual proceeds of the state's inheritance tax, the proceeds of all oil license taxes, and the proceeds of that portion of the tax on metal mines formerly credited to the common school interest and income fund."
Kester, Glenn E., A Summary of the Outstanding State School Finance Legislation Proposed and Enacted During the Year 1931, Graduate School Indiana State Teachers College, No. 66 (1932)Summary of the Outstanding State School Finance Legislation, Glenn E. Kester.

1931: Outstanding State School Finance Legislation is proposed and enacted.
The Montana Legislature adopted a "new budget act requiring a uniform budget system throughout the state."
Kester, Glenn E., A Summary of the Outstanding State School Finance Legislation Proposed and Enacted During the Year 1931, Graduate School Indiana State Teachers College, No. 66 (1932)Summary of the Outstanding State School Finance Legislation, Glenn E. Kester.

1949-1969: Montana School Foundation Program is enacted.
During the 1949 Legislative Session, the Montana School Foundation Program was enacted and "was the basis for several iterations of the public education funding reviews. One such review was conducted in the 1957 Interim Session, prompted in part by the rise of the Baby Boom that started in the late 1940s."
Montana Quality Education Coalition

The School Foundation Program Act described "a basic philosophy that it is the state's obligation to assist the school district in the financing of its minimum operating cost on an equalization-of-financial-effort-basis." [19] The Act "made step-by-step provisions for the financing of this minimum operating cost." [20] And, after the amount of the program had been established, the Act provided the system of financing. [20] "The Foundation Program Act not only provided for the financing of the minimum educational program... but also provided for the financing of the educational program above the required foundation program... through the district permissive levy and the district voted levy." [24-27] "Since these sources of revenue financed the maintenance and operation of the educational program, they were combined into one fund for financial administration-- the general fund. Other funds for specific purposes were available to the school district but the general fund was the most important since it provided for the largest portion of the financing of the educational program." [27]Campbell, John P., A Legislative and Financial History of the Montana School Foundation Program (1949-1969), 1978 (A Legislative and Financial History of Montana School Foundation Program, John P. Campbell).

Post-Constitutional Convention of 1972

"Discrepancies in statewide equity persisted, and in 1985 a group of plaintiffs filed suit against the state claiming violation of the fundamental constitutional right of persons in the State to equal protection of the law and to equality of educational opportunity... In a 1989 special session, the Legislature made significant changes to the funding formula for public education through House Bill 28."
Montana Quality Education Coalition

"Despite the 1989 changes to school funding, the underlying structure still contained large elements of the School Foundation Program. Additional litigation was initiated in 1991 by Helena Elementary and also by the Montana Rural Education Association claiming inadequacy in the revised funding formula. The cases were heard in early 1993 during the legislative session. House Bill 667, enacted during the 1993 session, address the majority of the issues in the Helena Elementary and MREA lawsuits. The Court rules the suits moo[t] as a result of House Bill 667."
Montana Quality Education Coalition

Drafting

Montana Constitution of 1889

Montana Constitution Article XI, Section 2 (1889)
Original. Section 2. The public school fund of the State shall consist of the proceeds of such lands as have heretofore been granted, or may hereafter be granted, to the State by the general government, known as school lands; and those granted in lieu of such; lands acquired by gift or grant of the general government; and of all other grants of land or money made to the State from the general government for general educational purposes, or where no other special purpose is indicated in such grant; all estates, or distributive shares of the estates that may escheat to the State; all unclaimed shares and dividends of any corporation incorporated under the laws of the State, and all other grants, gifts, devises or bequests made to the State for general educational purposes.

Mont. Const. Art. XI. sec. 2 (1989).

Montana Constitution of 1972

Amended. Montana Constitution Article X, Section 2 (1972)

Section 2. Public School Fund. The public school fund of the state shall consist of:

(1) Proceeds from the school lands which have been or may hereafter be granted by the United States,

(2) Lands granted in lieu thereof,

(3) Lands given or granted by any person or corporation under any law or grant of the United States,

(4) All other grants of land or money made from the United States for general educational purposes or without special purpose,

(5) All interests in estates that escheat to the state,

(6) All unclaimed shares and dividends of any corporation incorporated in the state,

(7) All other grants, gifts, devises or bequests made to the state for general educational purposes.

Mont. Const. Art. X, sec. 2 (1972).

Montana Constitutional Convention of 1972

Delegate Commentary
Delegate Woodmansey: "I'd just like to make a few comments regarding this section. This section is just the same as the present Section 2 of our present Constitution. Just a few comments taken from our report... 'In securing assured sources of support for the educational system, the committee agreed that the constitutional protection should be supplied to the public school fund. Section 2 in the existing Constitution has provided this protection by itemizing the components of the fund and unequivocally specifying that these contributing funds should be used for education. The name public school fund which appears in this section is adopted as the name to be used consistently hereafter in the Constitution.'"

Chairman Graybill: "Is there discussion of Section 2? If not, members of the body, you have before you on the recommendation of Mr. Woodmansey, when this body does arise and report after having had under consideration Section 2, that we recommend it be adopted. All in favor, say Aye."

Delegates: "Aye."

Chairman Graybill: "Opposed, No."

No response.

Chairman Graybill: "It's adopted."
Montana Constitutional Convention 1971-1972, Verbatim Transcript (Mar. 9, 1972 -- Mar. 16, 1972) Vol. No. VI 1825, 1989 (1981).

Interpretation

Helena Elementary School District v. State (1989)

"The Montana Supreme Court ruled that the State's education funding system was unconstitutional both because it resulted in inadequate funding and because the spending disparities among the State's school districts "translate into a denial of equality of educational opportunity." The Court concluded 'that the plain meaning of the second sentence of subsection (1) is that each person is guaranteed equality of educational opportunity.'"
<ref>Education Law Center, Montana </ref>

Columbia Falls Elementary School District v. State (2005)

"The Montana Supreme Court determined that the State's school funding system did not meet the constitutional requirements of a "basic system of free quality public schools." The Court wrote: "Unless funding relates to needs such as academic standards, teacher pay, fixed costs, costs of special education, and performance standards, then the funding is not related to the cornerstones of a quality education." The Court also explained that a "system of education includes more than high achievement on standardized tests."

As a result of the Court's decision, the State enacted a new funding system and took steps to address other education concerns cited by the Court."

<ref>Education Law Center, Montana </ref>

MQEC v. State (2012)

"The Montana Quality Education Council filed this suit, claiming that the State was out of compliance with the funding statute enacted to remedy its constitutional violation in the Columbia Falls case. The parties and the Court signed a Consent Decree, in which the State pledged to provide the annual inflation adjustments that plaintiffs sought. The Decree also stated that, 'economic hardship or a change in financial circumstances of the State shall not serve as a basis for modification of this Consent Decree.'"

<ref>Education Law Center, Montana </ref>