Editor’s Note: This was originally published about a year ago (last March), but we’re publishing it again because the bill is coming due. We won’t know the amount until the school year is up and every school in the state has to figure out how much to bill other districts for, but permissive levy notices have gone out and tax payers are learning how this will impact their bill.
One of the ‘Things Our Government Has Been Up To’ is House Bill HB203, which passed into law. It’s marketed as a bill about school choice, although Montana was already a state that allowed for out of district enrollments.
One of the things it does, is that it makes it harder for schools to say no to out of district enrollment. “Perhaps the most compelling and direct impact of HB203 is that Montana public school districts will no longer have absolute discretion to deny applications for out-of-district attendance.” There are very limited circumstances in which the law will allow districts to reject out of district enrollment.
More choice for parents? Not here. Our local schools have already been accepting out of district enrollments when they’ve been able to do so and meet the needs of the students. Less choice for school boards? Definitely. And for taxpayers…?
The taxpayers of the district accepting students aren’t on the hook for funding those students (and really weren’t before, since the state distributes school funding based on enrollment anyway), but the donating school district can expect to contribute over a thousand dollars of tuition per leaving student.
Will this impact district taxes and levies? Probably, especially in smaller districts where budgets run tight.
Did it increase our choices for where to send our kids to school? No. Not here. Not for us. Did it turn our kids into dollar signs for other school districts? They already were, due to the state’s method of redistributing funds. But it’s increased the number that goes with the dollar sign.
What did our local senator and representative vote? Yea.
The proposed library district has me looking at taxation again. One of the great things about Lincoln County is that, with three high school districts, it’s easy to figure out which communities provide the funds that keep our county going.
The Census offers these population estimates from the American Community Survey (the ACS is not my preferred source, but we are 4 years past the census)
Zip Code
Population
City
59923
9,545
Libby
59917
5,001
Eureka
59935
3,505
Troy
59934
763
Trego
59930
697
Rexford
59918
625
Fortine
59933
21
Stryker
Since Eureka, Trego, Rexford, Fortine, and Stryker are all in High School District 13, the relative populations are:
Seeing that North County provides 45.35% of the county’s tax revenues, the first thought that comes to mind is that secession from Lincoln County would be a better option than voting for a county-wide library district. County 57, with 45.35% of Lincoln County’s tax base, could afford to be a little less efficient and still provide better service.
A library that served just the LCHS high school district, looking at the tax base (45%) and population (35%), could provide north county residents with a heck of a lot better service than the pittance historically provided to Eureka does.
I like libraries – as an academic, I’ve spent a lot of time in them on one lit review or another. Still, I don’t get much return on a library in Libby – and in the proposal for a countywide district, we’d cover nearly half the cost and probably get a sixth of the service.
I want a library – but I’m tired of being taxed to provide jobs and services for Libby. If I get an opportunity to vote for a better library, closer . . . well, perhaps the first stage of secession is a special library district that isn’t countywide.
When we started the special levy for Trego School’s Building Reserve Fund, in 2021, the levy was 2.88 mills and raised about $5,000. There are two reasons why a school needs a special levy for the building reserve – first, the building reserve doesn’t have to be spent during the fiscal year. The fund can continue to grow and eventually have enough for the big ticket items (roofs seem to be a large expense when they need replacement. The second reason – in Trego the School Major Maintenance Aid kicks in about $12,000 to go along with the $5,000 your taxes raise.
When we can raise $17,000 for adding a tax levy that brings in $5,000 – it kind of makes sense. Our Building Reserve Levy is a fairly new thing for Trego School – and hopefully, five or ten years down the road, when the building needs a major repair, the Building Reserve will cover it. The school was federally funded as part of the impact funding when the tunnel and railroad relocation came in – but that was back in 1966. The building is aging, and it seems more responsible to keep it in shape – the Federal government won’t come by with a new one again.
In 2021, it took 2.88 mills to raise that $5,000. Now, in 2024, the levy is down to 1.96 mills. At first glance, the levy is down 32% – but that doesn’t speak to financial management. The levy still raises about $5,000 – but the taxable evaluation of the land has increased, so a lower mill rate raises the same amount. The problem with tax rates is that the figures don’t lie.
I kind of like the building reserve – but just because the mill rate has gone down, the taxes stay the same. And that’s OK if you take the time to understand how mills and tax levies work.
One of the ‘Things Our Government Has Been Up To’ is House Bill HB203, which passed into law. It’s marketed as a bill about school choice, although Montana was already a state that allowed for out of district enrollments.
One of the things it does, is that it makes it harder for schools to say no to out of district enrollment. “Perhaps the most compelling and direct impact of HB203 is that Montana public school districts will no longer have absolute discretion to deny applications for out-of-district attendance.” There are very limited circumstances in which the law will allow districts to reject out of district enrollment.
More choice for parents? Not here. Our local schools have already been accepting out of district enrollments when they’ve been able to do so and meet the needs of the students. Less choice for school boards? Definitely. And for taxpayers…?
The taxpayers of the district accepting students aren’t on the hook for funding those students (and really weren’t before, since the state distributes school funding based on enrollment anyway), but the donating school district can expect to contribute over a thousand dollars of tuition per leaving student.
Will this impact district taxes and levies? Probably, especially in smaller districts where budgets run tight.
Did it increase our choices for where to send our kids to school? No. Not here. Not for us. Did it turn our kids into dollar signs for other school districts? They already were, do to the state’s method of redistributing funds. But it’s increased the number that goes with the dollar sign.
What did our local senator and representative vote? Yea.
There are some confusing terms about the economy. Household production fits in with the things that you do for yourself that makes life a bit better. “Underground economy” and “shadow economy” refer to transactions that could be considered black market. Some things – drugs, prostitution, stolen merchandise – are in the underground economy practically by definition. Other items can be either in the regular economy or in the shadow economy.”
“Italy also has a sizable underground economy, which by some estimates accounts for as much as 17% of GDP. These activities are most common within the agriculture, construction, and service sectors.” This gives us the idea that it isn’t just an illegal immigrant involved. The underground economy can include otherwise respectable citizens.”
Household production isn’t mentioned in the analysis – but here, in northwest Montana, a single product provides an example – firewood. It benefits me to report the money that comes in from firewood sales. It helps me qualify as a farm, and make deducting expenses and depreciation possible. As household production, it probably cuts down the cost of heat by $700 – $1000 each winter. For others, it’s an underground economy, advertised on facebook, unreported to the government. The definition and source follows:
Investopedia puts the underground economy at 11 or 12% of the gross domestic product in the US. California’s Attorney General has an “Underground Economy Unit” and lists restaurants, janitorial work, the garment industry, retail, construction and car washes as the industries most impacted by wage theft. I don’t know – I recall talking about the US underground economy with a grad student. With a student visa, he wasn’t allowed to work in the US – yet he had held a job somewhere in the southern US, in a business owned or managed by an Indian national, who sent the paycheck to his father in yet another country. I think the term “wage theft” in that case would be accurate if you only looked at US records – and I doubt if it was reported to the IRS.
The Institute of Economic Affairs uses the term “shadow economy” and describes: “The main drivers of the shadow economy are (in order): tax and social security burdens, tax morale, the quality of state institutions and labour market regulation. A reduction in the tax burden is therefore likely to lead to a reduction in the size of the shadow economy. Indeed, a virtuous circle can be created of lower tax rates, less shadow work, higher tax morale, a higher tax take and the opportunity for lower rates. Of course, a vicious circle in the other direction can also be created.”
They go on to describe Denmark, where about half the population hires “shadow” workers. Much of the “shadow economy” they describe is labor from people who have a regular job, performing a non-deductible service for other private parties. The “shadow economy” is as much, or more, a place for our neighbors as for illegal migrants.
“In Canada, Schneider (2005) found similar reactions of people facing an increase in indirect taxes (VAT, GST). After the introduction of the GST in 1991 in Canada, in the midst of a recession, the individuals, suffering economic hardship because of the recession, turned to the informal economy, which led to a substantial loss in tax revenue. Unfortunately, once shadow economy habit is developed, it is unlikely that it will be abandoned merely because economic growth resumes (Schneider, 2005). The People who engage in shadow economic activities may not return to the formal sector, even in the long run. This fact makes it even more difficult for policymakers to carry out major reforms because they may not gain a lot from the reforms.”
Nearly 6 years ago, California passed legislation allowing legal marijuana sales – yet somewhere around 85% of the marijuana sold in California today is still in the “traditional” market – that’s right. Despite having laws and a system that allows for legalized sales, the illegal market provides 5 times as much marijuana to users than the legal market.
It takes no complex research to learn which part of the county pays the most taxes. The total market value and taxable values are available here and the webpage is fairly easy to use. We may have to resort to the 2010 Census to find numbers that would allow us to calculate the tax burden on a per capita basis – but the data are never perfect for the potential secessionist.
High School District 13 – Lincoln County High School – pretty well covers the north county (excepting the Yaak-Sylvanite area that is part of Troy’s High School District 1. Libby’s High School District covers the area that rules the county.
2021
Market
Taxable
Percentage
Libby K-12
$1,167,764,915
15,285,095
36.73%
HS-1 (Troy)
$561,686,888
7,578,222
18.21%
HS-13 (Eureka)
$1,324,462,346
18,742,346
45.05%
County-wide
$3,053,914,149
41,606,036
100%
2014
Market
Taxable
Percentage
Libby K-12
$744,585,246
13,613,729
38.44%
HS-1 (Troy)
$354,443,745
7,059,404
19.93%
HS-13 (Eureka)
$705,406,090
14,743,434
41.63%
County-wide
$1,804,435,081
35,416,567
100%
Extrapolating a line from 2 points isn’t the most accurate way to project a trend line. It does give a quick trend-line . . . and from this data, it looks like HS-13’s taxable value percentage is growing at almost half a percentage each year. Somewhere around 2031, the north end of the county will be over half the county’s tax base.
One way of looking at the situation is joy that we aren’t receiving all the government our taxes support. In general, our Libbyan bureaucrats don’t spend a lot of time in the north end of the county. On the other hand, the population in the north end isn’t growing quickly enough that we’ll be able to outvote them in my projected lifespan.
Perhaps it is time to get serious on the idea of county 57.
Trego's Mountain Ear 