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Massive increase to school tax credit bill passes Montana Legislature
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Massive increase to school tax credit bill passes Montana Legislature


Montana State News Bureau Chief Holly Michels summarizes the day's news from the Montana Legislative session for April 28, 2021.

A bill that increases the tax credit people can claim by giving to a scholarship program for private or public schools from $150 to $200,000 passed the Legislature on Tuesday.

House Bill 279 is from Republican Rep. Seth Berglee, of Joliet. It also increases the cap on the program to $2 million in 2023, with provisions to increase that by 20% in later years if donations come in at 80% or greater of the limit.

The bill also now allows donors greater control over where their donations go for public schools.

Republicans have defended the bill as helping students attend schools they otherwise couldn’t afford and pointed out that public schools can also benefit. On the private side, money goes toward scholarship programs that students then apply for assistance from. On the public side, those claiming the tax credit can direct the money toward programs that pay for innovative educational programs, such as transformational learning, support for those with disabilities, work-based learning partnerships and more.

Democrats have decried the bill as a boon for private schools and the tax credits as going to benefit the ultra-wealthy who could claim a credit of $200,000 that’s matched by the state.

The bill estimates a $4.6 million hit to the state's general fund by the 2025 fiscal year. A fiscal note also raises the concern of a long-term impact if students transfer to private schools, there could be a corresponding dip in the number of students going to public schools that would lower state funding over time. Berglee did not sign the note.

In support of the bill in the Senate on Monday, Ronan Republican Sen. Dan Salomon said in prior years 22% of scholarships went to minority students.

“These are being utilized to give students the opportunity to advance themselves and get a better education,” Salomon said.

Sen. Janet Ellis, a Helena Democrat, raised concerns about the dollar-for-dollar match the state puts out on tax credits.

“This seems excessive and I’d urge you to vote no,” Ellis said.

Sen. Greg Hertz, a Polson Republican, framed the debate about students, not specific private institutions.

“This is about dollars helping students,” Hertz said.

Offering some of the sharpest criticism of the bill, Sen. Ellie Boldman, D-Missoula, called it a “tax break for the mega-wealthy.”

“There may be some people in this building who have private schools and that kind of money,” Boldman said, referencing Republican Gov. Greg Gianforte, who helped found the private Petra Academy in Bozeman.

The bill expands on the school choice program that was revived last year by the U.S. Supreme Court. The program, enacted by the 2015 Legislature and signed into law by then-Gov. Steve Bullock, had initially been struck down in the state Supreme Court, which ruled the state could not fund religious programs through its tax credit program for private schools. The nation's high court reversed the state Supreme Court, saying rules written by the state Department of Revenue to implement the scholarship program could not disqualify religious schools.

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