Montana ESA Program

# Montana's Cautious Experiment: A Comprehensive Analysis of the Special Needs Equal Opportunity Education Savings Account Program

Section I: The Architectural Framework: A Targeted Intervention

Montana's entry into the national landscape of Education Savings Accounts (ESAs) represents a stark departure from the universal, market-driven models that have dominated recent policy debates. Established in 2023, the state's program is a deliberately small-scale, highly targeted intervention designed to serve a single, specific demographic. Its unique architecture—characterized by a narrow eligibility scope, a centralized state-run reimbursement system, and a novel funding mechanism—reflects a cautious and controlled legislative approach. Understanding this foundational design is essential for analyzing the program's nascent performance, its distinct financial implications, and the profound legal challenges that now define its existence.

Legislative Genesis: The Passage of House Bill 393

The Montana Special Needs Equal Opportunity Education Savings Account Program was created by the 2023 Montana Legislature through the passage of House Bill 393 (HB 393), officially titled the "Students with Special Needs Equal Opportunity Act".1 The bill, sponsored by Representative Sue Vinton, was signed into law by Governor Greg Gianforte on May 18, 2023, and became effective on July 1, 2023\.1 The legislation stipulated a transition period, with the program becoming fully operational for families starting with the 2024-2025 school year.3

The program's legal framework is codified in the Montana Code Annotated (MCA) under Title 20, Chapter 7, Part 17, with detailed operational rules established in the Montana Administrative Rules (Mont. Admin. r.) at section 10.16.4001.4 In the enabling legislation, lawmakers framed the program as a "desirable educational program" under their authority granted by Article X, section 1(3) of the Montana Constitution. The stated purpose is twofold: to ensure "equal educational opportunity for all children with special needs" and to provide educational avenues that will "develop each child's full educational potential".3

A Singular Focus: Eligibility Restricted to Students with Disabilities

In sharp contrast to the universal eligibility model pioneered by states like Arizona, Montana's ESA is a highly focused policy instrument.10 Participation is strictly limited to "qualified students" who have been formally identified as a "child with a disability" under the federal Individuals with Disabilities Education Act (IDEA).4

To meet the eligibility criteria, a student must be a resident of Montana and be between the ages of 5 and 19 as of September 10 of the program year.4 During the application process, a parent or guardian must provide official documentation verifying the student's IDEA designation. This typically takes the form of a current Evaluation Report, an Individualized Education Plan (IEP), or a private placement service plan that was completed by a public school evaluation team.11 The program explicitly excludes students who are enrolled in schools operated for youth in correctional programs or those attending the Montana School for the Deaf and Blind.11

Administrative Design: The OPI-Administered Reimbursement Model

The program is administered directly and centrally by the Montana Office of Public Instruction (OPI), under the authority of the State Superintendent.4 This centralized state agency model differs from the administrative structures in states like Florida, which delegate significant operational responsibilities to third-party, non-profit Scholarship Funding Organizations (SFOs).10

A defining feature of Montana's program is its operation on a reimbursement-only basis. This administrative choice has profound implications for accessibility. Unlike programs that provide families with pre-funded accounts on a debit card or through a digital wallet, Montana requires parents to first pay for all approved educational expenses out-of-pocket. After incurring the cost, they must compile receipts and submit them to the OPI for reimbursement.4 Although OPI's initial steering committee reviewed presentations from third-party financial platform vendors such as ClassWallet and Odyssey—the type of platforms that facilitate direct, pre-funded spending in states like Arizona—the agency ultimately opted to administer the program in-house, at least for its initial launch.10 Families submit their claims through a dedicated online reimbursement form hosted on the OPI website.18

This reimbursement structure, while potentially simpler for the state to manage and a stronger control against misspending, creates a significant liquidity barrier for participants. The model inherently favors families with the financial means to front thousands of dollars for private school tuition or specialized therapies and then wait for the state to process repayment. A family may have an eligible child, but if they lack the upfront capital or available credit to pay for services, they are effectively precluded from participating. This administrative design choice has direct consequences for equitable access, potentially creating a program that, in practice, disproportionately serves middle- and upper-income families with children with disabilities, even without any formal income-based eligibility criteria.

Furthermore, Montana's decision to create a small, targeted program for a high-need population, rather than a universal one, can be interpreted as a deliberate legislative strategy to avoid the fiscal explosions, administrative challenges, and political controversies that have characterized larger-scale ESA initiatives. The national policy context in 2023 was dominated by the trend toward universal ESAs, but also by the intense debates surrounding the billion-dollar price tags and documented oversight failures of mature programs like Arizona's.10 By limiting eligibility to a specific, sympathetic, and relatively small population, Montana lawmakers created a program with a naturally constrained budget and a more defensible policy rationale. This suggests a politically cautious "pilot" approach, allowing the state to test the ESA concept in a limited and controlled manner before considering any future expansion.

Table 1: Montana ESA Program \- Core Architectural Features

Section II: Financial Architecture and the Flow of Funds

The financial structure of Montana's ESA program is one of its most innovative and contentious features. Rather than relying on a direct appropriation from the state's general fund, the program is financed through a novel mechanism that diverts a portion of state education aid directly from local school districts. This design localizes the program's fiscal impact, dictates how award amounts are calculated, and forms the basis of the constitutional challenge threatening its existence.

Funding Mechanism: Diverting BASE Aid from Resident School Districts

The program's funding stream does not originate from a new, dedicated line item in the state budget. Instead, it is sourced directly from the operational funds of the participating student's resident school district.6 The process is initiated once a parent signs an ESA contract with the OPI. At that point, the OPI notifies the student's resident school district of their participation. The district is then statutorily obligated to remit a specified monthly amount for that student to the OPI from its general fund.6

These remittances are made over ten months, from August through May, aligning with the state's distribution schedule for its primary K-12 education funding, known as BASE aid.6 The enabling statute, MCA 20-7-1709, is explicit that this money must come from the district's general fund and may not include revenue from the state's separate "guarantee account," thereby focusing the diversion on the district's core operational budget.6

Once the OPI receives the funds from the district, the money is split. Ninety-five percent is deposited into a dedicated trust account established for the individual student, which is used to fund parental reimbursements. The remaining five percent is deposited into a state special revenue account designated for the OPI to cover the administrative costs of running the program.6

This mechanism of diverting funds directly from local district general funds, rather than from a broader statewide education fund, is a highly consequential design choice. It makes the fiscal impact of the program intensely local and visible. Unlike in Arizona, where ESA funds are drawn from the state's primary K-12 funding formula at the state level, the financial effect in Montana is not diffused across the entire state budget.10 Instead, it is concentrated on the specific budget of the district where the ESA student resides. This creates a direct, dollar-for-dollar financial transfer away from that district for each participating student, making the program a clear political and financial antagonist to local school boards and administrators. This localized impact is a central pillar of the legal challenge brought by the Montana Quality Education Coalition, an organization representing over 100 school districts that argues this diversion unconstitutionally harms public schools.9

The Award Calculation: The ANB Formula and District-Level Variation

The value of a student's ESA is not a uniform, statewide amount. Instead, it is calculated individually based on Montana's complex school funding formula, which determines a district's per-student funding allocation, or "Average Number Belonging" (ANB).5

The specific formula, detailed in Mont. Admin. r. 10.16.4001(4), calculates the award as the sum of several distinct per-ANB state aid payments that the student would have generated for their district. These components include the data-for-achievement payment, the Indian Education For All payment, per-ANB amounts from instructional and related services block grants, and the per-ANB entitlement amount, which is further adjusted by the ratio of the district's adopted budget to its maximum general fund budget in the prior year.3

Because these funding components vary significantly from one school district to another, the ESA award amount is unique for each student and is determined by their district of residence.5 To provide transparency, the OPI is required to publish a table of these preliminary award amounts for every school district in the state.5

The law also contains a seemingly paradoxical provision regarding student enrollment. MCA 20-7-1709(5) states that a student participating in the ESA program "is not considered to be enrolled in the resident school district." However, the same section mandates that the OPI "shall ensure that the participating student is included in the resident school district's ANB calculation".6 This is not a contradiction but rather a necessary legal and accounting maneuver. The ANB count is what triggers the flow of state aid to the district for that student. By requiring the student to be counted, the law ensures the district receives the state funds that form the basis of the ESA award. The district then acts as a temporary financial pass-through, remitting the designated portion of that aid back to the OPI. This complex mechanism allows the state to correctly calculate and source the ESA funding based on the per-pupil aid that would have been spent, while simultaneously executing a key provision of the parent contract: legally severing the school district's obligation to educate the child.3

Award Values and Allowable Expenses

Based on the ANB-driven formula, the OPI and independent analyses estimate that annual award values for the 2025-2026 school year will range from approximately $5,000 to $6,000 for elementary students and from $6,400 to $8,000 for high school students.11

Parents can seek reimbursement for a broad array of approved educational expenses. These include, but are not limited to:

• Tuition and fees at qualified private schools 3
• Curriculum, textbooks, software, and other instructional materials 3
• Online or distance learning programs 3
• Private tutoring 3
• Educational therapies from licensed or certified providers, such as occupational, behavioral, physical, and speech-language therapies 3
• Fees for state or nationally recognized assessment tests, Advanced Placement exams, or college entrance exams 3
• Services purchased on an "unbundled" basis from a public school, including individual classes and extracurricular activities 3

The program places a strict annual cap of $50 on reimbursement for consumable educational supplies such as paper, pens, and markers.4 Any funds that are not used by a family within a given year remain in the student's trust account and roll over for future use. These funds can be accessed until the student's 24th birthday, at which point the account is closed and any remaining balance is returned to the state's guarantee account.6

Table 2: Montana ESA Program \- Financial Architecture Summary

Section III: Enrollment Dynamics in a Nascent Program

Montana's ESA program launched in 2024 to minimal but slowly growing participation. The initial enrollment figures are exceptionally small, especially when compared to the total number of eligible students in the state. This slow uptake can be attributed to several structural factors, including a limited application window, a reimbursement model that creates financial hurdles, and a strict "switcher" mandate that limits the pool of potential applicants. Analyzing these early dynamics provides a clear picture of a program in its infancy, facing significant barriers to achieving scale.

The Launch Year: Tracking Initial Enrollment

The program became operational for the 2024-2025 school year, with the first application window opening from May 1 to June 1, 2024\.24 This initial window generated modest interest, with the OPI receiving 45 applications. Following a review for eligibility, the agency determined that 23 students, residing in 18 different school districts, were qualified to participate.25

Subsequent reports from the OPI throughout the program's first year have tracked the slow but steady formalization of this initial cohort. An August 2024 OPI newsletter, The Compass, reported that 17 families were officially under contract with the state to participate in the program.26 By late October 2024, an OPI press release announcing the second application window stated that 14 students were currently participating.12 The most recent update, from an OPI newsletter in early 2025, showed that enrollment had grown to 46 students.27

This initial enrollment represents a minuscule fraction of the potential eligible population. The legislative fiscal note accompanying HB 393 identified 21,127 students with disabilities in Montana's public schools as of October 2022, all of whom would theoretically be eligible for the program.20 The first-year participation rate of 46 students thus stands at less than one-quarter of one percent of the total eligible pool, underscoring the program's extremely small initial footprint.

Gateways to Participation: Application Windows and Process

Access to the program is controlled through two distinct application windows each year. The first runs from May 1 to June 1 for students intending to participate for the full upcoming school year. The second window runs from November 1 to December 1 for students wishing to begin participation in January of the current school year.4

The application, which can be submitted online or via a paper form upon request, requires standard demographic information, proof of Montana residency, documentation of the student's IDEA designation, and information on prior school attendance.4 Once the OPI confirms a student's eligibility, the parent or guardian must sign a legally binding contract with the state. A critical provision of this contract requires the parent to formally "release the resident school district from all obligations to educate the qualified student." This includes releasing the district from its duty to provide a Free Appropriate Public Education (FAPE) or to develop an IEP for the student, effectively transferring the full legal and educational responsibility to the parent.3

The "Switcher" Mandate: Analyzing the Prior Public School Requirement

A crucial gatekeeping mechanism built into the program's design is a conditional "prior year public school requirement".15 This mandate restricts eligibility to students who are, in effect, "switching" out of the public education system or are first-time entrants. To qualify, a student must meet one of the following three conditions:

1. Have been counted for ANB funding purposes in the previous school year, which generally means they were enrolled in a Montana public school.

2. Be newly eligible to enter a Montana public school, such as a student entering kindergarten or a family that has recently moved to the state.

3. Have been enrolled during the previous school year in a school for juvenile corrections or the Montana School for the Deaf and Blind.11

This structure is a powerful cost-control mechanism. It largely prevents students who are already established in private schools or long-term homeschool settings from becoming eligible for the ESA. This stands in stark contrast to the experience in Arizona, where the 2022 universal expansion allowed a large, pre-existing population of private school students to enroll, leading to an explosive and immediate increase in state costs.10 By design, Montana's program ensures that nearly every new ESA participant is a student for whom the state was already, or was about to become, financially responsible within the public system. The program is therefore architected to function as a transfer of existing educational spending from one sector to another, not the creation of an entirely new subsidy for private education. This design choice preemptively neutralizes one of the most potent fiscal arguments commonly levied against universal ESA programs.

The extremely low initial enrollment figures present a paradox for the program's future. On one hand, this weakness proved to be a crucial legal shield. In denying the preliminary injunction sought by plaintiffs, the judge specifically cited the "very low" participation rate as evidence that the alleged financial harm to public schools was too "speculative" to warrant halting the program.25 On the other hand, an enrollment of less than 50 students out of a potential pool of over 21,000 signals a failure to achieve the program's stated policy goal of meaningfully expanding educational opportunity for students with disabilities. This suggests that for the program to become more effective at its mission, the OPI will need to engage in significant public outreach and program administrators may need to reconsider the structural barriers—chiefly the reimbursement-based financial model—that may be suppressing demand.

Table 3: Montana ESA Program \- Enrollment Trajectory (SY 2024-2025)

Section IV: Participant Profile: Analyzing the Eligible Population

Given that the number of actual participants in Montana's ESA program is too small to generate a meaningful demographic profile, a more instructive analysis focuses on the characteristics of the eligible population. By examining the data on all students with disabilities in Montana's public schools, it is possible to construct a detailed portrait of the students the program is intended to serve. This analysis reveals a population that is not only growing but is also characterized by significant academic vulnerability and unique demographic compositions, providing crucial context for the program's policy rationale and its potential equity implications.

A Portrait of Montana's Students with Disabilities

According to data from the Montana Office of Public Instruction, there were 21,112 students aged 3-21 receiving services under the Individuals with Disabilities Education Act (IDEA) during the 2022-2023 school year.28 This group constitutes 14% of the state's total public school student population.28 This represents a significant and growing cohort; between the 2017-18 and 2022-23 school years, the number of students with disabilities in Montana increased by 12.28%.28

The population is diverse in its needs. The most prevalent disability categories identified among these students are Specific Learning Disability (SLD), which accounts for 29.26% of the total, followed by Multiple Disabilities (20.80%), and Speech or Language Impairment (17.18%). OPI data also highlights a notable increase in the number of students identified with a Developmental Delay, a trend attributed to a 2018 state policy change that expanded the age of eligibility for this category from age 6 to age 9\.28

Demographic Composition and Geographic Distribution

The demographic profile of Montana's special education students reveals important equity considerations. OPI data indicates that American Indian students are overrepresented in the special education population. They account for a 3.13 percentage point higher share of students with disabilities than their proportion of the overall state student population would suggest. Conversely, white students are proportionally underrepresented in this group.28

Furthermore, the distribution of students with disabilities is not uniform across the state's vast geography. Analysis from the University of Montana's Rural Institute for Inclusive Communities shows that disability rates tend to be higher in the central and western parts of the state. Notably, all five of Montana's largest urban areas—Billings, Bozeman, Great Falls, Helena, and Missoula—are located within counties that have higher-than-average disability rates, suggesting a concentration of need in and around these population centers.30

Educational Outcomes: Graduation and Proficiency Rates

The academic performance data for Montana's students with disabilities underscores the significant challenges this population faces within the traditional public school system. For the class of 2013, the most recent year for which this specific federal metric was reported, the graduation rate for special education students in Montana was 76%. While slightly higher than the national average for this group, it trailed the state's overall graduation rate of 84% by a notable 8 percentage points.31

More recent data on academic proficiency paints an even starker picture of academic vulnerability. OPI proficiency data shows that among students with disabilities, only 13.3% achieved proficiency in English Language Arts (ELA), and a mere 7% were proficient in Math. The outcomes for American Indian students with disabilities were even more concerning, with proficiency rates of just 5.7% in ELA and 0% in Math.28

This data provides a powerful, evidence-based rationale for the ESA program's existence. The extremely low proficiency rates, particularly in mathematics, demonstrate that the eligible population for the program is one of the most academically at-risk groups in the state. Proponents of the ESA can point to this data as clear evidence that the public school system, despite its legal obligations under IDEA, is struggling to adequately serve these students. This context reframes the policy debate, moving it beyond a simple discussion of school choice and toward a more urgent conversation about providing an alternative pathway for a population experiencing profound academic difficulties within the traditional system.

The overrepresentation of American Indian students among the special education population means they also constitute a disproportionately large segment of the ESA-eligible population. This fact raises critical questions about the program's accessibility and equity for this specific demographic. An effective evaluation of the program must therefore go beyond general income analysis and specifically track its accessibility and utilization by American Indian families. Factors such as the geographic availability of private schools or specialized service providers near Montana's reservations, coupled with the financial barrier created by the reimbursement-only model, will be crucial in determining whether the program is truly providing an "equal opportunity" for all eligible students.

Section V: The Fiscal Impact: Initial Projections and Future Debates

As a nascent program with minimal enrollment, the actual fiscal impact of Montana's ESA has been negligible to date. However, the official legislative fiscal note prepared for House Bill 393 provides a crucial baseline for understanding the program's intended financial footprint and the initial cost projections presented to lawmakers. A detailed analysis of this document reveals the state's assumptions about participation, the projected costs of both student awards and program administration, and a significant discrepancy between the funds appropriated for oversight and the resources deemed necessary by the implementing agency.

Deconstructing the HB 393 Legislative Fiscal Note

The fiscal note for HB 393, published in February 2023, is the primary source for official projections of the program's costs.20 The analysis within the note is built upon a key assumption: a participation rate of 100 students.20 This figure, while small, is more than double the actual first-year enrollment of 46 students, indicating that the initial fiscal impact is even smaller than these modest projections.

Based on the assumption of 100 participants, the fiscal note projected the total annual transfer of funds from school districts to the OPI. Using an estimated average award amount of $6,816.62 per student beginning in Fiscal Year 2025, the total transfer would be $681,662. Following the 95/5 split mandated by the law, this would result in $647,579 being deposited into student trust accounts for reimbursements and $34,083 being deposited into the OPI's administrative account.20

The bill itself contained a direct appropriation from the state general fund to the OPI to cover the initial administrative costs of setting up and running the program. This appropriation was set at $75,000 for Fiscal Year 2024, intended for program development, and $30,000 for Fiscal Year 2025 for ongoing operational expenses.3

However, the fiscal note simultaneously revealed a significant mismatch between this appropriation and the resources the OPI projected it would need. The agency estimated that it would require at least 2.00 Full-Time Equivalent (FTE) staff—an Accountant 1 and an Accountant 3—to handle the legal, accounting, and financial complexities of the program, at an estimated annual cost of $146,000.20 This created a substantial funding gap. The fiscal note calculated that additional general fund support beyond the direct appropriation would be required, estimating this need at $110,089 in FY 2024 and $114,565 in FY 2025.20

This discrepancy between the funds legislatively provided for administration and the amount the implementing agency estimated as necessary is a critical finding. It points to a potential under-resourcing of the program's administrative and oversight functions from its inception. This situation could force the OPI to manage the program with inadequate staffing, potentially leading to delays in processing reimbursements and insufficient oversight of expenditures. Alternatively, the agency might have to divert personnel and resources from other divisions to cover the shortfall. This dynamic mirrors the administrative strain observed in Arizona's much larger ESA program, where oversight capacity and staffing levels failed to keep pace with rapid enrollment growth, leading to significant accountability challenges.10 It suggests that under-resourcing program administration is a common potential pitfall in the implementation of ESA policies, regardless of their scale.

Setting the Stage for a Cost-Benefit Analysis

Because Montana's program is designed around a "switcher" model that requires prior public school attendance, its net fiscal impact on the overall state budget is designed to be minimal; it is primarily a transfer of already-allocated education funds from one entity (a local school district) to another (an individual student's trust account).

The primary fiscal impact is therefore felt at the local level. For each student who participates, their resident school district must remit thousands of dollars from its general fund to the OPI. As argued in the lawsuit challenging HB 393, this diversion of revenue diminishes the resources available to educate the students who remain in the public school system. The plaintiffs contend that this occurs without a commensurate decrease in the district's fixed operational costs, such as building maintenance, transportation, and core administrative staff, thereby straining local budgets.9 Any future comprehensive cost-benefit analysis of the program will need to weigh the per-student cost of the ESA against the marginal cost of educating that same student within the public system, a complex calculation that lies at the heart of the ongoing legal and political debate.

Section VI: The Legal Challenge: A Constitutional Contest

The most significant and immediate factor shaping the future of Montana's ESA program is not its enrollment numbers or fiscal impact, but a foundational legal challenge that questions its very constitutionality. Filed shortly after the program's enabling legislation was passed, this lawsuit represents a direct assault on the program's architecture. The initial court ruling in this case, while allowing the program to proceed for now, has created a precarious legal reality where the program's future viability is directly tied to its scale.

The Plaintiffs' Case: *Disability Rights Montana & Montana Quality Education Coalition v. Gianforte*

In January 2024, two advocacy organizations, Disability Rights Montana (DRM) and the Montana Quality Education Coalition (MQEC), filed a lawsuit in the First Judicial District Court in Lewis and Clark County.9 The suit names Governor Greg Gianforte and the Superintendent of Public Instruction as defendants in their official capacities. Representative Sue Vinton, the sponsor of HB 393, later successfully petitioned the court to intervene in the case as a defendant to help defend the law she championed.25

The plaintiffs' complaint argues that HB 393 is unconstitutional on several key grounds, each targeting a different aspect of the Montana Constitution's provisions on public education and the use of public funds:

1. Violation of Article V, Section 11(5) \- The Prohibition on Appropriations to Private Entities: This is the core of the plaintiffs' argument. This clause of the constitution explicitly states, “No appropriation shall be made for religious, charitable, industrial, educational, or benevolent purposes to any private individual, private association, or private corporation not under control of the state.” The lawsuit contends that the ESA program, by reimbursing parents for payments made to private schools, private tutors, and other private vendors, constitutes a direct and unlawful appropriation of public funds to private individuals and entities not under state control.9

2. Violation of Article X, Section 1(1) \- The Guarantee of Equality of Educational Opportunity: This clause obligates the state to provide for a system that develops the "full educational potential of each person" and guarantees "equality of educational opportunity to all." The plaintiffs argue that by diverting funds directly from local public school districts' general funds, the ESA program diminishes the resources available to educate the students who remain in the public system. They contend this disproportionately harms smaller, rural districts and undermines the constitutional guarantee of an equal educational opportunity for all students.9

3. Violation of State Appropriation Rules: The complaint also alleges that the program's funding mechanism violates Article VIII, Section 14, which requires that money be paid from the treasury only "upon an appropriation made by law." The plaintiffs argue that because the program is funded by open-ended transfers from school districts with no legislative cap on total participation, it creates a standardless and unconstitutional spending authority.9

The State's Defense and the Preliminary Injunction Ruling

The state's defense, articulated by the Governor's office and the Superintendent of Public Instruction, centers on the argument that the program is a necessary and valid exercise of legislative authority to provide flexibility and choice for families of students with special needs.21 They maintain that parents are best equipped to determine their children's educational needs and that the ESA empowers them to do so. Following the court's initial ruling, Superintendent Arntzen celebrated the decision as a "win" for parental freedom against "unaccountable bureaucratic associations".25

As part of their initial legal strategy, the plaintiffs sought a preliminary injunction to halt the implementation of the ESA program while the full case was litigated.25 In a pivotal ruling in July 2024, Judge Mike Menahan denied the request for an injunction.25

The judge's reasoning was crucial. While he acknowledged the "seriousness of the potential harms" to public school funding that the plaintiffs identified, he concluded that they had failed to demonstrate the imminent irreparable harm required to issue an injunction. The key factor in his decision was the program's extremely low enrollment. With only 23 students eligible to participate at the time of the hearing, Judge Menahan ruled that the financial impact on school budgets across the state was "too speculative to support an irreparable harm finding at this stage".25

This ruling allowed the OPI to continue administering the program, but it did not resolve the underlying constitutional questions. The case now proceeds to a full trial on its merits, leaving the program to operate under a cloud of legal uncertainty.25 The judge's decision creates a precarious future for the program, as its survival of this first legal test was a direct consequence of its small size and limited impact. The legal standard for the injunction required proof of "imminent irreparable harm," and the judge explicitly linked his denial to the fact that with so few participants, the financial harm was not yet proven to be concrete, but was merely "speculative." This implies that should enrollment grow significantly in the future—to several hundred or a thousand students—the fiscal impact on school districts would cease to be speculative and would become a measurable harm. At that point, the plaintiffs' argument would be substantially stronger, and the program could face a renewed, and potentially successful, legal challenge. In this sense, the program's very success in attracting more participants directly increases its legal vulnerability.

Table 4: Summary of the Constitutional Challenge to HB 393

Section VII: Concluding Analysis and Forward-Looking Implications

Montana's Special Needs Equal Opportunity Education Savings Account Program stands as a compelling case study in cautious and constrained policy design. In an era defined by the rapid expansion of universal school choice, Montana has deliberately charted a different course, creating a small, targeted, and administratively distinct program. This analysis has revealed a program architected to minimize fiscal exposure and political controversy, yet these same design choices have created significant barriers to access and have placed the program in a state of legal precarity. Its future will be defined by the interplay between its ability to grow, the fiscal pressures it creates, and the ultimate resolution of the fundamental constitutional questions it raises.

Synthesis of Findings: A Study in Contrasts

The defining characteristic of Montana's ESA is its targeted nature, serving only students with an IDEA designation. This contrasts sharply with the universal model of Arizona, which is open to all K-12 students.10 This initial design choice has cascading effects. The program's funding mechanism—a direct diversion from local school district general funds—is a novel approach that localizes fiscal impact in a way that statewide funding formulas do not. Its administrative model, which relies on parental reimbursement rather than a pre-funded digital wallet, creates a barrier to entry for lower-income families that is absent in platforms like ClassWallet used in Arizona.10 Furthermore, the program's strict "switcher" mandate, requiring prior public school attendance for most applicants, is a powerful cost-control feature that prevents the subsidization of existing private school students—a major driver of cost in universal programs.15

Collectively, these features appear to be a deliberate effort to avoid the pitfalls of fiscal explosion and administrative overreach that have been central to the debate over larger ESA programs. However, the result is a program with extremely low initial enrollment, serving fewer than 50 students out of a potential pool of over 21,000.20 This limited impact, while serving as a successful legal defense against an initial court injunction, calls into question the program's effectiveness in achieving its stated policy goal of expanding educational opportunity.

Key Performance Indicators for a Nascent, Targeted ESA

As the program moves beyond its initial launch phase, several key performance indicators will be critical to monitor its evolution and impact:

1. Enrollment Growth: This is the single most important metric. Tracking the number of applicants and new participants in the upcoming application windows will reveal whether the program can overcome its initial barriers and begin to scale, or if it will remain a micro-program with negligible impact.

2. Participant Demographics: As enrollment grows, it will be essential to analyze the geographic distribution of participants (rural versus urban) and, if possible, the socioeconomic status of participating families. Given the overrepresentation of American Indian students in the eligible population, tracking participation rates among this demographic will be a crucial measure of the program's equitable reach.28

3. Fiscal Impact on Districts: The number of participating students within individual school districts must be monitored. As participation becomes concentrated in certain districts, the localized financial impact will become more pronounced and less "speculative," providing concrete data for the ongoing fiscal and legal debates.

4. Legal Status: The progress of the DRM v. Gianforte lawsuit remains the most significant variable. The outcome of the full trial on the constitutional merits will determine the program's long-term existence.

Recommendations for Policymakers and Program Administrators

Montana's experience offers valuable lessons for stakeholders within the state and for policymakers nationwide who are considering similar programs.

• For the Montana Office of Public Instruction: To increase program uptake and better fulfill its mission, the OPI should consider launching a robust public awareness campaign targeted at families of students with disabilities. Concurrently, an internal analysis of the barriers to entry is warranted, with a particular focus on the impact of the reimbursement-only model on lower-income families. Exploring a future transition to a direct-payment platform could be a key enhancement to improve accessibility.
• For the Montana Legislature: Lawmakers should closely monitor the program's administrative funding to ensure the OPI is adequately resourced to provide effective and timely oversight, especially if enrollment begins to increase. They must also remain cognizant of the legal precarity created by the initial court ruling; significant program growth will strengthen the constitutional challenge against it, a dynamic for which the state must be prepared.
• For Other States: Montana's program serves as a valuable model of "ESA-lite." It offers a blueprint for states that wish to experiment with the ESA concept in a fiscally and politically cautious manner, with built-in controls against explosive growth and costs. However, it also serves as a cautionary tale, demonstrating how such controls, particularly in program administration, may severely limit a program's reach and ultimate impact on the families it is designed to serve.

#### Works cited

1. MT HB393 | 2023 | Regular Session \- LegiScan, accessed October 28, 2025, https://legiscan.com/MT/bill/HB393/2023

2. HB 393: Establish the Students with Special Needs Equal Opportunity Act | 2023 Montana Capitol Tracker, accessed October 28, 2025, https://apps.montanafreepress.org/capitol-tracker-2023/bills/hb-393/

3. House Bill 393 \- Montana State Legislature, accessed October 28, 2025, https://archive.legmt.gov/bills/2023/billhtml/HB0393.htm

4. Montana Special Needs Equal Opportunity Education Savings Account Program, accessed October 28, 2025, https://opi.mt.gov/Portals/182/Page%20Files/Education%20Savings%20Account/ESA%20OPI%20FAQ%2006.10.2025\_FINAL.pdf?ver=2025-06-11-100821-477

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