$1 million tax credits gone in minutes as Whitefish Schools secure tax incentive donation

Whitefish School District was among the Montana schools that were able to snag a portion of the $1 million in tax credits for donors of public schools as part of an updated donation program that provides supplemental funding for innovative educational programs.

When the Montana Department of Revenue’s online portal opened on Monday, Jan. 3, the available tax credits were gone in less than five minutes. Whitefish Schools Director of Business Lucie Shea says she was able to secure a donation of $2000, but right after all the funds were gone.

“I had one more (donor) who brought a check in at 8:05 in the morning and I had to turn him away, unfortunately,” she recalled.

The donation that Whitefish was able to secure with the dollar-for-dollar tax credits came from Nelson’s Ace Hardware in Whitefish, according to Shea.

Shea says the district really appreciates their donation and can use the donated funds in a variety of ways. She says the money could go toward programs and services for students with disabilities, work-based learning partnerships, or career certification programs.

“Those are the areas where I see the money will be most useful,” she said.

In order to participate in the program, school districts were required to register with the Montana Department of Revenue. Potential donors needed to contact school districts to which they wanted to donate and provide a host of information. The Montana Department of Revenue was suggesting districts have checks in hand the morning of the portal opening.

The tax credit for this program was expanded in 2021 after Gov. Greg Gianforte signed House Bill 279. This raised the donation limit from an individual, estate or business up to $200,000 — an increase from the previous limit of $150. But with this, the cap of tax credits available decreased from $3 million to $1 million.

These changes, and with the program being organized in a first-come-first-serve format, made securing donations under the tax incentive program difficult for schools.

Shea says unfortunately just minutes after the portal opened, the available tax credits were gone and she wishes all Montana schools had a greater opportunity to utilize this donation program.

“I just wish it was more equitable,” she said.

Other local school districts that were able to claim tax credits for their donors included Kalispell Public Schools and Lakeside-Somers, according to a Montana Free Press report.

According to an article by the Daily Inter Lake, Kalispell Public Schools had five staff members entering information simultaneously to attempt to secure a portion of the tax credits. When it was over the district had $80,000 from four donors accepted, but still had $67,000 in donations lined up that would have to be returned to donors because they could not secure more of the tax credits in time. Kalispell Superintendent Micah Hill had a similar response as Shea about the process.

“I’m struggling with it a little bit,” Hill told the Daily Inter Lake. “We’re grateful for the opportunity … but it’s a source of frustration for school districts and a source of frustration for people who wanted to donate.”

In the 2023 tax year, the cap for the program will increase to $2 million. Each year thereafter, a formula will be applied that if 80% of the previous year’s credits are claimed, the aggregate amount will increase by 20%. If not reached, the amount remains the same as the previous year.