The budget for Bozeman's high schools has increased by about $3 million, with most funding going toward transportation, its general fund, technology, adult education and retirement benefits.
As Bozeman Public Schools students ventured back into the classroom, their education will be funded by a new budget, unveiled at an August school board meeting.
The 516-page document tells the story of a community grappling from extreme growth with complicated -- and often temporary -- tax laws.
"We're in a good place right now," said Lacy Clark, BSD7 director of business services.
Clark's statement shows the district's confidence after a summer of uncertainty about state property taxes and federal funding.
In July, the district disclosed that federal Title funds had been frozen -- funds used to support professional development and English learners. The Trump administration's reasoning for the freeze included accusations of money being used to "subsidize a radical left-wing agenda." The government cited programs in Washington and New York they say helped illegal immigrants and queer students.
The funding was ultimately restored after 24 states sued the federal government for access to the congressional appropriations, rescuing BSD7 from an approximately $367,000 loss.
After funding was restored, Bozeman School Board trustees voted unanimously against sending a drafted letter petitioning Montana's congressional delegation. Even so, Mike Waterman, executive director of business and operations, emphasized that "all funding is kind of at risk," highlighting the uncertainty surrounding federal education funding, especially as universities in Montana continue to experience funding cuts and freezes.
Teachers may have a spring in their step because negotiations with the district earlier this year yielded a 4.2% salary increase. A portion of this increase will be offset by an 18% increase in insurance premiums. The increase, larger than in previous years, was formulated based on higher-than-average claim rates and the desire to cultivate a stable reserve budget.
Educators also walked away with a 3% increase and a $1,500 "cost of living stipend" for 2026-27, contingent on voter approval of a general fund levy in May.
These salary increases make BSD7 eligible for $2.12 million from the STARS Act, passed by the Montana Legislature. The act provides incentives to districts with starting teacher pay over a minimum threshold. Bozeman's starting teacher salary outpaces the national average.
Recovering from the pandemic
BSD7's bureaucracy still bears the marks of both the pandemic and the construction of Gallatin High School, funded by a voter-approved $125 million bond. The high school budget is set to increase by 5% this year due in part to the district seeing a recovery from deficits due to enrollment spikes.
The elementary budget, which has been in the red by $3-4 million for the past two fiscal years, has increasingly been subsidized by leftover cash in the high school budget. Elementary enrollment, which has seen a steady decline since the pandemic, school officials said, is attributed to the prohibitive cost of living for young families.
The approved budget document reads that the district "has long been aware of how unsustainable our financing structures were." Using projections based on BSD7's current population, Bozeman's high school enrollment is expected to decline as the elementary student body ages into grades 9-12.
Ultimately, this "cross-subsidizing" reality may spell trouble for a teetering budget, officials acknowledged.
Actual spending has remained lower than annual budget requests, however. Clark announced at an Aug. 18 School Board meeting that actual spending put the high school budget in the black by about $1.4 million, aiding the elementary budget, which is about $959,000 in the red.
The high school budget will increase by about $3 million, putting the most funding toward transportation, its general fund, technology, adult education and retirement benefits while reducing the amount in its flexibility and tuition reserves. These reserves are used to cover costs associated with special education and out-of-district students, among other areas.
The elementary district budget, which will increase by 5.4%, follows a similar pattern and raises funding for transportation and technology.
A pivot away from a traditional seven-period day to a block schedule at Bozeman and Gallatin high schools has made a "huge impact" in reducing the budget, according to Clark. Waterman quantified the reduction: "If forced to give an answer, I would say the schedule change saved 10 teacher positions equal to (at that time) about $725,000 per year."
Waterman also pointed out that increased enrollment has largely offset staffing reductions.
Playing the long game
It's difficult to play the long game as Bozeman's population continues to grow while state education funding remains below the national average of about $8,400 per pupil, according to data from the Education Data Initiative. Montana's state government, which enjoys a higher-than-average contribution per pupil from the federal government, pays about $6,200 per student.
To supplement a total expenditure per pupil more than $1,500 below the national average, Montana schools utilize property tax revenue. BSD7 will levy an additional $2.1 million in property taxes compared to last fiscal year, translating to a 3.6% tax increase. A majority of residential taxpayers will likely see a shift in their tax burden, however, as changes from the temporary Montana House Bill 231 will bring relief after a harsh reappraisal year in 2023.
Some $1 million of the increase is driven by transportation costs, as the district adds more bus routes and copes with Bozeman's sprawl. New bus routes include those for young students who were part of this summer's Jump Start programming, funded to support students behaviorally and academically. The programming, offered four days a week, worked with seven community partners at three Bozeman elementary schools.
The absence of a Montana sales tax means that schools garner funding from property tax revenue. A majority of residential taxpayers will likely see a shift in their tax burden, however, as changes from the temporary Montana House Bill 231 will bring relief after a harsh reappraisal year in 2023.
Because of changing tax rates, the value of a mill (the unit in which levies are quantified) will change as well. BDS7 will levy approximately 158 mills, compared to approximately 143 mills from last year.
Most of the added mills will go toward debt service, transportation and the general and building reserve funds.
A mill is defined as 1/1000 of each dollar of taxable value, which correlates to 1% of taxable value for a levy of 10 mills. This year's reappraisal cycle means an adjustment of the value of a mill, with the value going down if reappraisal yielded a lower taxable property value.
The district's decision to raise mill counts will result in higher contributions, mostly for homeowners with property valued at over $1.5 million, as recent legislation creates a tiered tax bracket. The residential tax rate for such homes is 2.2%, double the rate for $400,000 to $1.5 million homes.
Many homeowners, therefore, will see a reduction in tax payments to BSD7 even with the increase in mill amounts.
In the future, adding programming such as high school baseball will add costs to the district's budget. Baseball, which has been a subject of discussion at summer board meetings, requires specific facilities that neither high school was built to accommodate, leading the district to analyze several off-campus locations for practice and game sites.
The Bozeman Varsity Baseball Initiative, comprised of community members passionate about welcoming a new high school sport, was asked to raise $100,000 to kick-start baseball in BSD7. Having delivered the check in August, trustees plan to vote on baseball's future this school year in September.
Garrett Schultz, former manager of the American Legion Bozeman Bucks, said, "The passion and the excitement and the want for this project hasn't changed at all."
Schools have come back to life, with buses grinding, school lunches ladled onto plastic trays, and sneakers squeaking on waxed gymnasium floors.
And it's all due to a carefully portioned pie chart, described over 516 pages.