Montana’s Lagging Ways

11-12 Tapping Capitalism V5comp slides

Take a look at the link that’s right above this post. It’s a pdf of three state comparison slides that we’ve been using to demonstrate the real problem Montana has with economic development. What it shows is that, while Montana consistently ranks middle of the road in economic and demographic comparisons nationally, we’re at the bottom of the pack when compared to the states around us.
If we want to fund legitimate government needs we need economic growth and jobs. If we want people to be happy and reach their potential we need to give them the opportunity for earned success. We’re lagging our neighbors in virtually all of these measures because of policies that have been put in place that may have been well-meaning at the time but that remove options and retard growth in the long term. We’re now reaping the ‘rewards’ of those policies through low wages and high unemployment compared to our neighbors.
The problems are many and the solutions are difficult. But they just grow and get more difficult the longer we wait. Here are a few things the legislature and governor should do yesterday to return Montana’s competitiveness and allow our citizens to pursue happiness and reach for their potential:

[list type=”check”]

  • Labor Reform: Become a right to work state, become an ‘at will’ state, and bring the minimum wage back to federal levels
  • Budget Reform: Reform our state budgeting process so that we spend based on priorities rather than politics
  • Legal Reform: Reform our liability system to decide based on rule of law rather than preferred outcomes of specific cases. This is the biggest single impediment to businesses and job creators coming into the state. If they can’t estimate their future liability risks they’ll move on to someplace where they can
  • Pension and Pay Reform: Most state employees are not overpaid, but too many have migrated into higher pay bands over the past ten years while lower paid workers have been left behind. Our pension system is $10 billion underfunded. Without true reform we won’t be able to keep the promises we’ve made to our public employees.
  • Land Use: The federal government owns about 30% of Montana’s lands and is increasingly trying to regulate the rest. We should decide what happens in Montana and we are capable of regulating responsible development, whether it’s in agriculture, resources, or recreation.
  • Health Care: Obamacare will raise health care costs and decrease access to quality care. We need to implement consumer-driven reforms that allow patients and doctors to make responsible decisions rather than being dictated to from Washington.
  • Education Reform: Our education funding system is a mess and our rules don’t allow parents, teachers, and students to innovate and ensure each student gets the best possible education. We need choices and new thinking, not just more money thrown at the problem.
  • Government Transparency and Accountability: Taxpayers have a right to know how their dollars are being spent and what’s being done in their names. We need the state to post spending, actual spending not just projected budgets, so that each Montanan can be a citizen watchdog and a responsible part of the process. Senator Taylor Brown has a bill to do just that. Take a look at it and tell your legislators and the governor what you think.


That’s a pretty good start and what MPI will be working on to make Montana competitive again, but mostly to provide each of us the opportunities that free people deserve.


Montana’s Education Funding: A Fiscal Roadmap for Montana (2012)

By Curt Nichols, MPI Fellow

Click here for full study. (PDF – 3.4MB)

Executive Summary

Montana’s school funding and administration system is complex, and disappointing student outcomes indicate room for improvement. Those who wish to improve the system will need a basic understanding of these systems or their arguments and ideas will fall on deaf ears. Yet few people do understand these systems, the incentives they create or the forces that have led to their complexity.

Schools are financed by a mixture of state, federal, and local funds. District budgets are regulated by state statute with restrictions on local control to meet state constitutional mandates as interpreted by the courts. Governance is shared by the elected local board of trustees, the governor-appointed state board of public education, the legislature, and the elected superintendent of public instruction.

Montana’s constitution guarantees equity and adequacy in our education system. School district have successfully challenged the state’s funding system based on both these guarantees in separate actions over the past two decades. In response to the Montana Supreme Court’s equity ruling, variations between districts’ budgets have been limited, state funding has been increased, state subsidies have been targeted at districts with smaller relative property tax bases, and district budgeting practices have been revised. The adequacy ruling has resulted in new entitlements and increases in state funding. The overall effect has been an increase in school spending and a reduction in district-to-district spending variation.

Districts have varying expenses and resources that are based on differences in demographics and economic bases. Districts enroll varying proportions of low income and handicapped students. These students require additional resources. Districts also vary widely in their tax and non-tax revenue bases. These widely varying revenue bases lead to large differences in property tax rates between districts spending at only modestly different levels and keep spending near statutory minimum levels in some districts.

Montana students perform well when compared to other states. However, this good performance is partly due to demographic attributes characteristic to Montana, including fewer low income, minority, and English language learners that place fewer burdens on our schools than in more populous states. The large numbers of small, rural districts, which perform well with these groups, aid the state’s overall performance record. In spite of Montana’s solid performance record, it is important to consider the relative weakness of the United States education system in international comparisons as well as the failure of our schools to meet our own expectations. Many Montana students are inadequately prepared for post-secondary education. In particular, high percentages of low income and Indian students graduate without proficiency in mathematics and science.

The impact of equity and adequacy lawsuits has been primarily to increase funding for districts. The district judge in the adequacy case specifically excluded considering student performance as an indicator of funding adequacy despite the fact that national studies demonstrate that the link between funding levels and student performance is weak. Performance incentive programs in other states and advocated by the some federal education programs are based on a belief that incentives matter and can be used to improve schools and student outcomes. Montana does not have voucher or charter school programs and only minimal performance incentive funding. Despite support in numerous other states, the rejection of these programs is partially attributable to comfort with Montana’s relatively good current student performance on standardized tests. Interestingly, other states that have adopted performance-focused programs have learned that incentives matter and actually boost student outcomes.

This paper endeavors to help parents and policymakers better understand a complex education funding system in order to more effectively evaluate education policy in the future. Our hope is that Montana’s primary and secondary education system is not only the best in the nation in terms of academic performance but also the most efficiently managed and administered in terms of dollars and cents. Our children and taxpayers deserve no less.

Enough Already! – Your Tax $$ at Waste

$400 billion in waste at the federal level due to program duplication. We could do the same analysis at the state level and save $$$ millions.

New school spending data now on OpenGovMT website


Carl Graham


Montana Policy Institute

(406) 219-0508


HELENA — A website that tracks budget data for Montana’s K-12 schools has now been updated with the most current information available on public spending.

Earlier this year the Montana Policy Institute launched that allows people to view public information on state employee salaries and school financial data. The website has now been updated to include 2010 school spending.

“This is a great resource for all citizens concerned with how their money is spent, and keeping the data current is crucial,” said MPI President Carl Graham. “Ultimately, we hope government will take the steps to routinely achieve this kind of transparency. Until that happens, MPI is proud to bridge the information gap to provide this data to the public.”

The updated school spending information follows a request this year by the news organization Montana Watchdog for copies of the current superintendent contracts from all the school districts in the state. Twenty percent of school districts contacted did not provide a copy of the public document.

“This clearly highlights ongoing issues with transparency in the state of Montana that need to be addressed,” Graham said. “Public information is a misnomer if the public can’t actually get their hands on the information.”

Montana Watchdog is an independently operated news organization that was started as a project of MPI.

The latest data on school spending and more information on government transparency can be viewed at For an interview with Montana Policy Institute’s Carl Graham call (406) 219-0508 or email


The Montana Policy Institute is a nonprofit, nonpartisan policy research center based in Bozeman. To find out more visit us on the web at

Enough Already! – Top 5 Federal Stimulus-Funded Job Creators

This chart by the Mercatus Center compares the top five federal stimulus-funded job creators. Data are from the most recent quarter of recipient reported data from, the reporting period ended June 30, 2010.

Bozeman Nonprofit Announces School Financial Transparency Web Site

Press Release

Today the Montana Policy Institute unveiled a comprehensive web site containing school financial data from across the state. The site,, provides historical revenue and spending information for every school district in the state, and allows Montanans to compare district revenue, spending, staffing, performance, and other measures across any five districts and with state averages.

The site’s goal, according to MPI president Carl Graham, is to provide citizens, opinion leaders, and lawmakers with a user friendly and comprehensive source of information on school revenues and spending from around the state. The site contains easy to use search tools and graphics that translate raw data from official but difficult to navigate sources into usable and understandable information. “The goal isn’t to pass judgment or change any minds” according to Graham. “We want to raise the level of debate about school spending by providing taxpayers with as much information as possible. Once they see the data they can decide for themselves what the numbers for their district mean.”

The site guides users through historical revenue and spending levels across a variety of categories, including salaries, administrative costs, and more. They can also compare revenues and spending categories along with achievement scores across five school districts of their choice along with state averages. All of the data was gleaned from official state sources over a six month period by scouring government web sites. But not all of MPI’s collection efforts were successful.

“We also wanted detailed district level spending so that we could see more than just how much was spent and actually provide taxpayers with a view of what their dollars were spent on” said Graham. Unfortunately, nearly 45% of all districts did not respond to MPI’s data requests. Another 45% or more responded that MPI could copy the documents in district offices or pay to have them copied and mailed – a challenging task with over 400 state school districts but within their rights under current law. And of the remaining districts fewer than 10% provided any usable data at all. The results of these requests are also at so that people can see how – or if – their district responded to data requests.