Local school districts get slice of $1M in tax credits

Within minutes, $1 million in tax credits were claimed by Montana public schools as part of an updated donation program intended to provide supplemental funding for innovative education.

When the Montana Department of Revenue online portal went live at 8 a.m. on Monday, school districts around the state raced to enter as much donation information as possible, on a first-come-first-serve basis to claim dollar-for-dollar tax credits.

Local school districts that were successful in claiming a portion of tax credits for their donors included Kalispell Public Schools, Lakeside-Somers and Whitefish School District, according to a Montana Free Press report. A separate donation for private schools went to St. Matthew’s Catholic School in Kalispell.

School districts were required to register with the Montana Department of Revenue beforehand in order to participate. Prior to the portal opening, donors had to contact school districts they wanted to donate to directly, and provide information such as name or business name, last four digits of a Social Security number or federal employer identification number, mailing address, physical address and email address.

An individual, estate or corporation could donate up to $200,000. This is an increase from $150. The expanded credit comes after Gov. Greg Gianforte signed House Bill 279 in the spring.

The state department of revenue recommended school districts have donations in hand.

AT KALISPELL Public Schools, five staff members, including Superintendent Micah Hill, were entering donor information for pre-approval from the state department of revenue. He said that the portal allowed up to five people to enter information at one time.

By 8:03 a.m., Hill said the portal showed $2,000 remaining in unclaimed tax credits, but by the time he submitted another donor’s information he received an error message. The remaining tax credits had likely been claimed as schools around the state were simultaneously entering information.

When it was over, Kalispell Public Schools had $80,000 from four donors accepted. However, he said there was an additional $67,000 in donations that did not make it into the system before the tax credits were gone. Those donations will be returned Hill said, which is a source of frustration. People may still make charitable donations to schools but will not receive the dollar-for-dollar tax credit this program offered.

“I’m struggling with it a little bit,” Hill said about the program. “We’re grateful for the opportunity … but it’s a source of frustration for school districts and a source of frustration for people who wanted to donate.”

“What I see is there’s huge support for public schools and innovative education programs,” he later added.

“I’m not sure of a way to make it more equitable, or fair, what that would look like from a legislative rule,” he said.

Somers-Lakeside School District was successful in securing $5,000 from one donor.

While some school officials anticipated all the money would be spoken for within an hour, Somers-Lakeside Superintendent Joe Price was hoping for at least half an hour but was not surprised. Price said he had an additional donor, but was missing part of an employer identification number.

“At 8:07 I got the number we needed, but the whole $1 million that was available was taken,” he said.

Both Hill and Price had publicized the tax credit program beforehand, including on their respective district websites and through emails to families. Kalispell Public Schools campaigned on social media and also partnered with the Kalispell Chamber of Commerce to publicize it to business members.

In addition to the Innovative Education Program, there was an additional $1 million in tax credits available to Student Scholarship Organizations, which benefit students attending private schools. As of Wednesday evening, $176,500 in tax credit had been claimed with $823,500 remaining for the 2022 tax year.

In the 2023 tax year, the caps for each program increase to $2 million. Each year thereafter, a formula will be applied that if 80% of the previous year’s credits are claimed, the aggregate amount will increase by 20%. If not reached, the amount remains the same as the previous year.

DURING SEPARATE phone interviews, Hill and Price expressed concerns about how equitable the programs are even if it is supplemental funding.

“One good thing is that there were people out there that wanted to donate to public schools and this gave them the opportunity to get tax credits. On a statewide level, I’m not sure how to feel,” Price said. “In essence, it lets people donate Montana income tax to a specific school. Normally, taxes go into the state general fund and that goes to support all [public] schools in the state.”

For Kalispell Public Schools, Hill also expressed earlier concerns about the competitive nature of the Innovative Education Program, which doesn’t discern between the size or affluence of communities with Class AA to Class C districts. What matters is how fast information is entered and accepted through an online portal. And while superintendent of Kalispell Public Schools, it is not lost on Hill that students from 13 outlying partner school districts go on to attend Flathead and Glacier.

How money donated through the Innovative Education Program is spent is fairly broad. It may be used for post-secondary credit or career certifications; work-based learning partnerships; services and equipment for students with disabilities; technology and other “transformational and advanced learning opportunities” for students.

Innovative Education Program Donations

Big Sky School K-12 — $694,000

Kalispell Public Schools K-12 — $80,000

Livingston Elementary — $73,000

Montana City Elementary — $55,000

Shepard Elementary — $50,000

Great Falls Elementary — $40,00

Somers Elementary — $5,000

Whitefish Elementary — $2,000

Student Scholarship Organization Program (as of Jan. 8, 2022)

Ace Scholarships SSO, MT LLC — $107,000

Holy Spirit Catholic School — $45,000

St. Matthews Catholic School — $13,500

Reporter Hilary Matheson may be reached at 406-758-4431 or by email at hmatheson@dailyinterlake.com.