Responding to a constitutional mandate from the State Supreme Court, the Montana state legislature in 2005 established a school funding formula that was intended to be “self-executing” and included a mechanism for annual inflationary adjustments. For FY 2013, the mandatory inflationary adjustment called for a 2.43% increase, which would provide $8 million to the state’s school districts. Late last year, the governor vetoed a bill which would have required transferring certain tourism money to the state general fund to cover the full inflationary increase. The Montana Quality Education Coalition then filed a suit to compel the state to “take specific steps” to provide the state’s schools with the “mandated inflationary adjustments that are required by law.”

Last week, the plaintiffs and the state entered into a consent decree to settle Montana Quality Education Coalition v. The State of Montana. Under the terms of the decree, which has now been submitted by both parties for acceptance by the court, the districts will receive the full statutory increase, and the court will retain jurisdiction to oversee the implementation of the decree. The proposed order also specifically provides that “Economic hardship or a change in financial circumstances of the State shall not serve as a basis for modification of this Consent Decree.”