Lima School in Beaverhead County faces an uncertain future as the federal government withholds millions in tax payments owed on public lands, threatening to force the closure of one of Montana’s most isolated school districts.
Beaverhead County, Montana’s largest by area, sits atop roughly two-thirds public lands. The Red Rocks Lakes Wildlife Refuge alone spans 39,000 acres along the Idaho border within the county. Because the federal government owns this land, it pays property taxes to the county—except it does not pay the full amount.
County Commissioner Mike McGinley says Beaverhead County is owed approximately $2 million in unpaid federal taxes on these properties. Congress currently reimburses states and counties for only about 20 percent of the total value of national wildlife refuges nationwide, leaving rural communities to absorb the gap.
The impact on Lima School is acute. With roughly 10,000 residents spread across the entire county, Lima is a one-mile-wide town. The school’s nearest alternative is at least 50 miles away, making closure a practical hardship for families with no other local option.
Kiersten Bernard, a Lima School sophomore and county resident, said the school’s precarious position has weighed on her for years. “It honestly broke my heart,” Bernard told reporters, according to Montana Public Radio. “You know, I have very deep roots here, and so it made me pretty upset.” Bernard began hearing serious conversations about the school’s future survival as early as sixth grade.
School Board member Erin Montgomery, herself a parent of a student, has been fighting the funding crisis for three years with little progress. The district has explored creative solutions to stay afloat. The school building itself is a two-story structure with a cafeteria at its center, currently operating with an unfilled cook position. One classroom that traditionally housed first and second graders is being reconfigured to include kindergarten through second grade in the upcoming year.
Path Forward Uncertain
The school’s best near-term strategy is to pursue “Isolation Status,” a state funding designation intended to help remote districts offset geographic disadvantages. Lima School expects to reach the threshold for that classification in approximately three years, assuming current conditions hold.
The broader problem extends beyond Lima. Mark Haggerty, quoted by Montana Public Radio, framed the issue as a structural failing of federal policy rather than a county-specific problem: “When Congress doesn’t pay for it, everybody gets a proportional share. So it’s not Beaverhead County that’s the problem.”
Rural Montana school districts dependent on property tax revenue from federal lands have long struggled with inadequate reimbursement rates. When Congress underfunds its property tax obligations to counties, those counties must find revenue elsewhere—or schools must cut services and staff. For a district as small and geographically isolated as Lima, the margin for error is razor-thin.
The situation underscores a recurring tension in rural governance: large tracts of federally owned land reduce the local tax base while providing national benefits—wildlife conservation, public recreation, ecological protection—that Congress has been unwilling to fully fund at the county level. Lima School’s fight for survival is a visible consequence of that policy gap.
