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State land revenue shell game hurts schools

2011-09-12T00:00:00Z State land revenue shell game hurts schoolsBy Lance Melton and Dave Puyear, IR YourTurn Helena Independent Record

The state Department of Natural Resources is once again trying to lead the public into believing that an increase in state land revenues results in increased funding for Montana’s public schools. And unfortunately, when the department goes fishing for news coverage of this incorrect assertion, the media often accepts the assertion with little if any analysis. Case in point is recent news coverage of oil and gas leases on state lands (“Public schools will get the money” says a Great Falls Tribune article from Sept. 9). Other signs of the effort include recent coverage of the potential increased revenues for schools that could be generated if grazing fees were increased by 100 percent across the state or the coverage of the governor’s plan to exchange state for federal lands that could generate additional revenues.

We have not chosen sides in any of these debates and it is particularly great to hear that oil and gas leases on state lands in Montana are on the rise. The problem is, our current laws on the books work to divert money generated on state lands not to children but to general government. It just happened to the tune of $81 million just two years ago when the state received a one-time bonus payment for the Otter Creek leases in Eastern Montana. Under laws still on the books, the money went into the general fund and replaced money already appropriated for schools. The end result was that the state’s ending fund balance was $81 million higher than it would have been without Otter Creek and schools got what they would have gotten without any money generated by the Otter Creek bonus payments. In the meantime, voters failed an inordinate number of school levy elections in the last cycle, often citing their belief that schools had received a windfall in state land revenues as the justification for voting no. 

When informed regarding what is really happening, the public does not like this shell game anymore than schools do. In a poll conducted by Zogby International that our organizations jointly commissioned in November 2010, 67 percent of likely voters expressed their opinion that the state should have sent the $81 million in Otter Creek state land lease revenues directly to local school districts.

The issue was covered extensively and accurately by Lee Newspapers reporter Mike Dennison (see “What happens to Otter Creek coal revenue, regarding schools and other programs” March 18, 2011, Billings Gazette) and our organizations dutifully wrote our obligatory guest editorial (see Billings Gazette editorial from April 6, 2010, titled “Schools forced to cut while state diverts revenues to general fund”) reminding the public that schools do not benefit from increased state land revenues. In spite of being fully aware of how state land revenues are actually distributed (or at least hopefully since DNRC is the state department that handles such distributions) state officials at DNRC are doggedly persistent in renewing their misleading rhetoric each time the issue of state land revenues comes up. Their rhetoric does not match reality and the best person to talk to in order to confirm that fact is the district superintendent, clerk or board chair in your local community.

State land revenues are constitutionally dedicated to K-12 public education under Article X, Section 5, of the Montana Constitution. That section specifies that 95 percent of such revenues shall be apportioned annually to public elementary and secondary school districts, with the other 5 percent going to the permanent trust. This law, however, has been interpreted in statute in a manner that makes the connection between state land revenues and schools virtually meaningless.

So, the next time you hear someone say or read a news story that claims that increased state land revenues are “for the kids,” don’t bite the hook. Better yet, help us convince lawmakers and other state policymakers to change the laws so that state land revenues truly benefit schools on top of, rather than in lieu of, money already appropriated for schools. Then we can all rest confident in an assertion that state land revenues really are put to work “for the kids” in our public schools. 

Lance Melton is executive director of the Montana School Boards Association.

Dave Puyear is executive director of the Montana Rural Education Association.

Copyright 2015 Helena Independent Record. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(2) Comments

  1. CharityVerlene
    Report Abuse
    CharityVerlene - September 12, 2011 3:19 pm
    So after MTSBA and MREA spend all legislative session making sure oil districts don't share their money they now want to make sure grazing and ag don't share their money across the state either? How absurd! I won't vote for another mill levy as long as the Helena School Board throws away money paying dues to Melton and Puyear!
  2. Curmudgeon
    Report Abuse
    Curmudgeon - September 12, 2011 2:01 pm
    A little primer on where most "State Lands" come from: all western lands are divided into numbered north or south "Townships" (from the state's Base Line), also numbered east or west "Ranges"(from the state's Principal Meridian). A township is 6 miles x 6 miles, i.e., 36 square miles. Each square mile is numbered, from 1 to 36.

    All lands not already encumbered or "patented" by the federal govt, to private parties or other entities, are called "Public Domain", property of the people of the US.

    When a territory is admitted to the Union as a state, Section 16 and Section 36 of each township in the Public Domain are patented to the State Govt; the state may sell them, lease them, whatever, but any revenues from them are to be used only for public education. That is why they are called "school sections".

    I over-simplified a bit...the state can acquire lands from other entities, but that is the basic system of "school sections".

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