Donors Reach Public School Tax Credit Cap in Minutes | 406 Politics

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In moments earlier this week, individuals and businesses under a recently increased cap on the amount they could claim in tax credits by donating to schools hit the $ 1 million limit set by the legislature. of State.

The period for claiming the credit through a donation of up to $ 200,000 opened on Monday and reached the limit in less than six minutes, the state Revenue Department said this week.

Ten public school districts were able to pre-approve 23 donations, from 20 people and three businesses that claimed the credits. Individuals donated $ 938,000 and businesses donated $ 62,000 to reach the $ 1 million cap, the finance ministry said.

In 2021, the state legislature significantly increased the amount a person or business can claim in a loan from $ 150 to $ 200,000. The $ 1 million cap on total claimed credits increases in 2023 to $ 2 million, with provisions to increase it by 20% in subsequent years if donations reach 80% or more of the limit.

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Last year, lawmakers also changed the existing program to allow those claiming the funds to direct them to specific school districts that can use the money for innovative educational programs. Lawmakers have also broadened the terms of how money can be spent. On the private side, the money goes to scholarship programs that students can then apply to in order to receive help.

Three scholarship organizations have pre-registered the donations of 12 people. The Ace scholarships received five donations, as did St. Matthews Catholic School, and Holy Spirit Catholic School had two, according to the Department of Finance.

The 10 public school districts that recorded donations were Big Sky School K-12; Bonner elementary; Great Falls Elementary School; Elementary of Kalispell; Kalispell High School; Livingston Primary School; Elementary of the city of Montana; Elementary Shepard; Elementary Somers; and Whitefish Elementary.

Big Sky Schools received $ 694,000, MTN News reported, nearly 70% of the total amount that went to public schools.

The district is in one of the wealthiest areas of the state. County Gallatin, where the district is located, has the lowest rate of students receiving free or reduced lunch in the state.

State tax laws make the identity of donors private, protected as confidential tax information.

At a meeting in November, several state lawmakers expressed concern that some districts could claim the credits quickly, leaving others in the dust in terms of access to finance.

“The problem is that the people who could donate might be in the larger school districts like Kalispell and… some of the larger areas and some of the smaller schools might not be able to benefit at the might level. happen in some of the bigger school districts, ”said Senator Jill Cohenour, a Democrat from East Helena who heads the interim income committee, said last year. “This is where the disparity could take place.”

From 2016, the program’s first year, to 2021, the Bozeman School District received the most funding, with $ 4,893, representing just over 21% of all contributions. The Great Falls School District came in second, with 14% of all contributions.

Nine districts or regions received less than $ 1,000, including the Kalispell School District at $ 428, only 8% of what Bozeman received.

“There is a big disparity,” Senator Shannon O’Brien, Democrat from Missoula, said at the November committee meeting. “I’m looking at a total of $ 143 in region five (Cascade, Fergus, Golden Valley, Judith Basin, Musselshell, Petroleum and Wheatland counties) and I’m looking at $ 3,135 in region 11 (Chouteau, Glacier, Lewis and Clark, Liberty, Pondera, Teton and Toole counties). And then Great Falls (school district) received $ 3,278.

During the November meeting, Bob Story, executive director of the Montana Taxpayers Association, predicted that the issue of equity and access to education programs “will end up raising its heads in a lawsuit and that the ‘State will have to face it’.

In November, a lawmaker said he believed the donations will go mostly to small districts in the state.

“I think the districts that will benefit the most are the rural districts, where you have rural benefactors…” said Senator Brian Hoven, a Republican from Great Falls. “I think we’re going to see rural districts benefit more than anyone.”

And while some rural districts like Montana City Elementary received $ 55,000, Shepherd Elementary saw $ 50,000, Somers Elementary received $ 5,000 and Bonner received $ 1,000, MTN reported, by far most of the l The money went to Big Sky or other more urban districts.

Republican state representative Seth Berglee, of Joliet, said in an interview this week that he was not surprised at how quickly the public school cap was hit. He pointed out that changes made by lawmakers to increase the limit that an individual or business can claim, as well as the ability to direct money to a specific school, were pushing for haste.

Berglee said he did not fully support a late change to his legislation allowing schools to use money on an expanded list of things, but he said he still believed schools receiving more money were a good result.

The legislator-designate has said he would also like to see the curriculum reconsidered in the next legislative session to reduce the allocation of money to public schools. Initially, it could only be used for new innovation programs, which Berglee said would help struggling students.

The opening up of spending options, he said, prompted some districts to organize donation drives around credit.

“My intention with the program was to help struggling children,” said Berglee, adding that the scholarship component of the program was working as he intended. He has not reached the ceiling.

“Still, it’s not really bad that schools are funded and that there is a tax credit,” Berglee said. “This money was going to go to government elsewhere. With that in mind, I would like them to make adjustments on the public side mainly. “

While a few last-minute rule changes by the Revenue Department made it easier to track exactly when a contribution was made, some schools have reported frustration with the fast pace, the Montana Free Press reported this week.

From the perspective of the state revenue department, “the donation process and portal worked seamlessly to implement what the Montana legislature provided for in law,” a spokesperson said this week. .


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