Report: Montana schools underfunded by $100M despite spending millions on improvements

Montana’s public school districts are underfunded by more than $100 million for infrastructure, with most of the financial burden falling to local school districts, according to a 2025 national report.

During a School Funding Interim Commission meeting earlier this month, district officials told lawmakers earlier this month how the funding shortfall impacts their ability to keep schools operating, as reported by Montana Public Radio.

Helena School District Facilities Director Todd Verrill told the committee, which is tasked with drafting recommendations for changes to Montana’s funding formula, that the way the state currently funds facility maintenance is “scraping by.”

Prior to is current role in Helena, Verrill held a similar job at Fort Harrison. There, he said he had a $16 million budget to maintain buildings for about 2,700 people. In Helena, a district with more than 8,000 people, the budget is only $6.24 million.

“If I sound like I'm angry, folks, I am,” Verrill said. “I come from the military where there's a $900 billion budget a year at the federal level, and we're scraping for pennies to educate our children.”

Verrill brought a rusty pipe from Helena High School’s 75 year-old boiler system with him as “show and tell.”

“This broke off, I could break this off with my finger,” he said. “We're using a steam boiler plant in that school, which is so archaic, you can’t get people to work on it.”

Helena voters passed the largest bond in Montana history at $253 million last fall, Verrill said, to rebuild two high schools and an elementary. These funds will go towards repairing issues like the boiler, but Verrill said it shouldn’t take getting to the point of an “emergency” to fix these problems.

“Every emergency is the priority, so I can't prioritize long range projects because I don't have the funding to do it,” Verrill said. “The funding we do have, we have to go out and beg people for– I have to apply for grants, we have to ask the taxpayers.”

Local taxpayers front the majority of the costs for facilities maintenance, and in recent years, more voters have sided against it.

Hamilton has asked voters to approve moving students out of the current middle school into a renovated space to better fit their needs, but the community has opted against it at least twice. The school had to delay the return to school in the fall because of a bat infestation.

A 2025 report released by the nonprofit 21st Century School Fund found over the course of a decade local taxpayers paid more than 95% of maintenance costs. The state pays 1.3%, compared to a national average of 21%, the report said.

The federal investment in that time was 3.4%, representing in part the infusion of pandemic infrastructure funds.

The state’s biggest most recent investment in school maintenance comes from a sub-fund of the coal severance tax trust fund– which gets 10% of the taxes on coal until the fund reaches $300 million.

Montana schools spent nearly 10% of their budget, or about $216 million, between 2019-2023 on infrastructure improvements. But schools are still underfunded by about $100 million, according to the report.

The other 90% of a school’s budget goes towards teacher and staff pay, and the state is still working to help increase teacher pay through incentives like the STARS Act which gave districts additional funds for raising starting teacher pay to $42,000.

But recruiting and retaining teachers is still an issue, especially in rural communities with limited housing, Business Manager for Hobson Public School Stacy Auck told lawmakers.

“In a small community, if you lose your school, you lose your community,” she said. “I think that that's a fear for some of our smaller schools.”