Local Schools Asked To Pay Back Millions Of Dollars - ABC FOX MONTANA NEWS, WEATHER, SPORTS - KTMF/KWYB

Local Schools Asked To Pay Back Millions Of Dollars

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BOZEMAN -

Three local school districts are being asked to return millions of dollars to the federal government. All three Montana congressional delegates are hoping the government and schools can work something out.

The U.S. Department of Interior is asking three school districts near Yellowstone National Park to return a total of $7 million.

The Department of Interior said it accidentally overpaid schools in Gardiner and West Yellowstone for the last 37 years.

These schools received special payments from the National Park Service since 1948 since they serve park employees' children who live on untaxed federal land.

Those payments were supposed to stop in 1976 when congress passed the Payments in Lieu of Taxes program, or PILT.

That's payments the federal government makes to local governments instead of paying property taxes.

But the original payments continued when the PILT program took effect, doubling the money the schools were getting.

Department of Interior officials said they are legally required to take the money back.

But Senators Jon Tester and John Walsh along with Congressman Steve Daines are seeking a compromise for the three small schools.

"Quite frankly they are in no position to pay back the kind of money this could potentially be," said Tester. "We don't want to put any schools into bankruptcy."

The Department of Interior just discovered the error and stopped the original payments, just as local schools are getting ready to make their budgets for next school year.

Because of that, Tester said he's hoping to get everyone together to find a solution soon.

"They need to know exactly what the ramifications are and more importantly we need to develop a path forward for everybody," said Tester.

Interior officials say one solution is Montana's delegation could pass legislation to allow the schools to keep those funds.

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