Gallatin High School Progress

School officials check out construction progress at Gallatin High School in Bozeman in this January file photo.

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Bozeman school officials say they have money cover the extra $2.3 million a year it will cost to run two high schools, but they need voters’ approval to pull it off in a way that won’t raise property taxes.

School Board trustees voted 7-0 Monday to place a $1 million-a-year “transition” tax levy on the May 5 school ballot, asking Bozeman high school voters to pass a new property tax for up to six years.

School officials promised voters weary of tax hikes that they intend to use money the district already has to offset the entire $1 million, so there would be no net tax increase.

That promise will be written into the language on the ballot so it’s legally binding, said Mike Waterman, school district business director.

When Gallatin High School opens this August, it will cost an additional $2.3 million a year to operate the second high school — to pay for more teachers, custodians, utilities, extracurricular activities, team travel and similar costs.

But opening a second high school produces zero additional dollars. Montana bases school funding on how many students a district has, not how many buildings it has.

Bozeman is losing the economies of scale that it has enjoyed by operating the state’s largest high school, Waterman said.

Concerned that Bozeman High is becoming too big, the public voted overwhelmingly in 2017 to approve a $125 million bond issue to build a second high school and upgrade the original high school.

The school district has earned $4 million in interest on that bond money, he said. Legally that money that can only be used for the high school construction projects — not for paying for the education that goes on inside the buildings.

The School Board’s priorities are tax relief and to offer the quality education the community expects at the two high schools, Waterman said.

If voters agree to the $1 million transition levy, that levy money could be used legally to pay for operating costs. School officials would use the interest from the bonds to lower the bond debt taxpayers have to cover by $1 million a year.

To pay next year’s bond debt of $12.2 million, the district would pay bondholders with $1 million from the interest money to reduce taxpayers’ burden to $11.2 million.

To explain the complicated financial moves, the district is preparing a brochure to be sent out just before ballots are mailed in mid-April.

“I feel like it’s going to be really tricky thing to explain to voters,” said Trustee Douglas Fischer.

Trustee Gary Lusin said he has tried to boil it down for people by explaining that some funds can only be used legally for buildings, while other funds can be used for operations.

“We’re asking the community to use money we have for operational costs,” Lusin said. “They have to give us permission to use money we already have for the operational costs.”

Trustee Heide Arneson said with the city planning to ask voters for parks and trail fees, and Gallatin County asking for new levies for the 911-dispatch center and search and rescue, “there’s real fatigue out there” among taxpayers.

“I think this is a real good solution,” Arneson said. “We want to take money we’ve set aside and repurpose it.”

The rest of the money needed to cover the $2.3 million shortage would come from $5 million the school district has saved up over the last six years or so, anticipating the extra cost of running the second high school, Waterman said.

If voters pass the transition levy, that pot of savings will be used for four years of the high school transition, he said. If not, the savings would cover two years.

Waterman said they don’t have a plan for how to cover $1.3 million for years five and six. But by then enrollment is expected to grow, which will bring in more money and bring the student-teacher ratio back to where it is today.

“The deficit will decrease over time as we grow into the building,” Waterman said. If school officials can’t find money to offset the $1 million transition levy in years five and six, he said, “we won’t levy it.”

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Gail Schontzler can be reached at gails@dailychronicle.com or 582-2633.

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