Innovative tax credit program could use innovation

A few local school districts managed to get a sliver of the $1 million in funding made available in a state program offering tax credits to people who donate to public schools — but not without some frantic mouse clicking and little luck.

The Innovative Educational Program tax credit is available to taxpayers who make donations to provide supplemental funding for innovative education. The credit is equal to the amount of the donation — now up to $200,000 per person after the Legislature voted to raise the individual limit from $150 — and is available on a first-come, first-served basis until the total credits claimed reaches the threshold for the year.

That threshold was set at $1 million for 2022, and it took all of five minutes for districts across the state to gobble up the entirety of the funding.

School districts were required to register with the Montana Department of Revenue beforehand in order to participate. The online portal went live at 8 a.m. on Jan. 3, and school districts around the state raced to enter as much donation information as possible.

Kalispell, Somers-Lakeside and Whitefish each snagged a slice of the pie, along with six other Montana communities, but many others missed out entirely in what unfortunately became a cutthroat competition that ultimately favored one affluent school district.

The big winner was Big Sky School District in southwest Montana — home of the private and ultra-wealthy Yellowstone Club and Spanish Peaks Mountain Club — which took the bulk of the total with a $700,000 donation.

Kalispell claimed $80,000 in donations from four donors, which was the next highest total in the state. Somers-Lakeside garnered a $5,000 donation, while Whitefish received $2,000.

Kalispell Public Schools Superintendent Micah Hill said an additional $67,000 in donations allotted for Kalispell never even made it into the system before the cash was gone. Those donations will have to be returned.

Meanwhile, Billings Public Schools came away empty handed, despite having a $20,000 donation secured, as did Helena public schools.

While it’s encouraging to see so much interest from donors who want to support public education (and get that tax break), the feverish system used to disperse the funding is far from equitable — particularly when one school can claim 70% of the pie within seconds because of one donor with deep pockets.

Rural districts with fewer resources — or even just slower internet speeds — don’t stand a chance in the mouse-clicking rat race.

The Department of Revenue needs to build upon this year’s results to create a more “innovative” and inclusive system for 2023, when the threshold increases to $2 million.

Clearly, donors are hungry to contribute, so let’s make the system work for as many students as possible across the entire state.