LOUISVILLE, Ky. (WDRB) – In the decade since the global finance crisis, Kentucky lawmakers have cut the state’s spending on just about everything except base funding for K-12 schools.

But as the General Assembly starts work on the state’s two-year budget, educators and advocates are worried that basic education funding could finally be on the chopping block.

Among other pressing issues, lawmakers need to come up with an extra $1.4 billion to pump into the state’s underfunded pension plans for government employees, and no one is sure where they will find the money.

“When you have a single line item like education that occupies over half of your budget, it’s almost unavoidable that some educational services will see cuts this time around,” said Sen. Chris McDaniel, a Republican from Taylor Mill who chairs the Senate budget committee.

To be sure, Gov. Matt Bevin told Kentucky Educational Television last week that the state’s basic funding for schools – called Support Education Excellence in Kentucky, or SEEK – is “not in jeopardy” with the new budget, which will cover the fiscal years that end June 30, 2019, and June 30, 2020.

Kentucky spends a little more than $3 billion a year on SEEK funding to school districts.

“But what comes at the expense of that?” Bevin said. “The pension crisis, our tax structure that's antiquated and outdated, our indiscriminate use of monies on other programs that maybe are not the primary focus of government or should not be. Every dollar we spent or every dollar we spend on any of those other things comes at the expense of education, infrastructure, law enforcement and taking care of the most vulnerable among us. There’s only so much money.”

Bevin will unveil his proposed spending plan Tuesday during his budget address before the House and Senate, but the task of actually writing and passing a budget falls on lawmakers.

McDaniel said finding enough money to cover increased pension contributions without touching education spending will be difficult, if not impossible.

Basic education funding “may see a cut,” he said, even if state investment in education can be said to go up because of more money going into pensions for teachers and school district employees.

“We have reached a point of absolute crisis, and sometimes the most important things come into the crosshairs because you have no other options,” McDaniel said.

Waiting for the budget

Currently, about $8.3 billion of state’s $21.7 billion General Fund budget for the two-year period ending June 30 goes to the Kentucky Department of Education.

The lion’s share of the education department’s budget – $6.1 billion – is for SEEK.

The money is doled out to local districts based on a formula that ensures poorer districts with lower property values get more state funding per student while districts with larger local tax bases get less.

That’s why any cuts to SEEK would disproportionately affect poorer districts, advocates say.

Jefferson County Public Schools, one of the state’s wealthier districts, collects $2,926 in SEEK funding per student, according to KDE data.

JCPS’ funding primarily comes from property taxes levied in Jefferson County and paycheck taxes on Jefferson County workers. This year, the district’s budgeted local tax receipts totaled $626.7 million versus $246.3 million through SEEK.

As of now, JCPS officials aren’t projecting a local property tax increase for the annual tax bills that will be due at the end of the year since receipts are projected to increase 4.2 percent in the upcoming school year, according to budget documents presented at Tuesday’s school board meeting. But that projection assumes no cut in the state’s base SEEK funding.

Diane Porter, chair of the Jefferson County Board of Education, said the district can dip into its emergency fund for a one-year solution if SEEK spending gets reduced in the upcoming state budget.

“During that time, if that’s what we have to do, then we have to go back and look at all of our expenditures and determine how we will come up with a longer-term plan if that’s what we have to do,” Porter said.

Oldham County Public Schools is one of the districts in which SEEK and local revenues are nearly equal, and like others across the state, officials there are keeping a close eye on the budget lawmakers will craft in Frankfort.

Last fiscal year, the school district reported $40.5 million from local receipts, mostly from $30.3 million in property taxes, and $40.5 million from SEEK. In this year’s budget, local revenues total $41.5 million, with $31.6 million from property taxes, while SEEK accounted for $39.5 million.

That SEEK funding breaks out to $3,636 per pupil in the district last year and $3,541 per pupil this year, according to KDE data.

OCPS Superintendent Greg Schultz says his district is better suited to weather any budget cuts at the state level, but it will need to make some tough financial decisions in the years ahead if the state cuts funding.

Raises for teachers and other items on the district’s wish list likely would be placed on the back burner, he said.

“We’d like to increase our gifted and talented staff because we like to serve our children that much more,” Schultz said. “We feel like we are moving more with our electronic devices and we may need to look at something with our technology staff to support that because teachers don’t have time to try to teach and then try to fix a device. They need some support on that backside as well. So we’ve got a pretty good vision of where we want to go, but we always have to think in the back of our minds how’s that going to affect the financial end, and sometimes you have to draw a line in the sand.”

The district didn’t seek a property tax rate increase last year, but Schultz said that could change in the future depending on the state budget.

“What I think the community in general does not understand is that the state may cut, but then it always comes back to the local taxpayer,” he said.

Other school districts, particularly those in Appalachia, are facing far more dire straits. There, districts have seen sharp drops in unmined mineral tax receipts.

Rep. Regina Huff, a special education teacher and Williamsburg Republican who chairs the House Budget Review Subcommittee on Primary and Secondary Education and Workforce Development, said educators in her part of the state have expressed “grave concern” about possible state budget cuts.

Districts there, she said, have already cut their budgets “to the bone.”

“Now we are looking at having to go ahead and maybe do away with sports, extracurricular activities, which is one of the things that keeps kids in school and going to school, so we don’t want to do that,” Huff said. “We need to find a middle ground.”

Other districts in the region have slashed their administrative budgets to cope with lean financial times, she said.

“We’re going to have to look at some way to assist them, whether it be some type of loan debt that we work out, but we cannot allow those schools to falter,” Huff said, adding that she does not support cutting SEEK funding in the budget.

‘Pulling the rug out’

Education advocates agree and say the state shouldn’t cut SEEK funding when crafting the budget, particularly since policymakers hope to see improvements in student achievement through new academic standards passed last year in Senate Bill 1, the broad education reform law.

Brigitte Blom Ramsey, executive director of the Prichard Committee for Academic Excellence, said cutting SEEK “could be detrimental to our ability to achieve the ambitious goals we’ve set as a state.”

“Without the funding to follow up on those ambitious goals, we’re pulling the rug out from underneath of our school districts and making it that much harder for them to support our students to achieve the goals and their potential,” she said.

“We’re especially making it hard when our focus is on closing achievement gaps and ensuring we’re supporting students who are coming from low-income backgrounds, students of color and students of different race and ethnic backgrounds.”

Others point out that the state has effectively cut basic education funding because appropriations haven’t kept up with inflation.

Since 2008, the state’s per-student funding has dropped 15 percent when inflation is factored in, said Ashley Spalding, a senior policy analyst at the Kentucky Center for Economic Policy.

Meanwhile, the gap in total per-student funding between the state’s wealthiest and poorest school districts is nearly as large now – $1,399 – as it was in 1990 – $1,558 – before the Kentucky Education Reform Act took effect, according to a recent report by KCEP.

The 1990 law was passed in the wake of a Kentucky Supreme Court decision that mandated adequate funding for the state’s public education system given the constitutional requirement of “an efficient system of common schools.”

And while SEEK has been shielded from budget reductions since 2008, other educational expenses like textbook spending have been cut, Spalding said.

Some district officials who responded to KCEP’s survey said their current funding situations have caused them to reduce staff, halt plans to add or expand programs and services for students, or put off needed maintenance in facilities and transportation, for example.

“These trends are really concerning, especially given this is what you see when you have so-called flat funding,” Spalding said. “Well, what happens when additional cuts happen? What would happen? All this is happening at the same time that local districts are raising (local) taxes, so this is a really concerning picture that we have of what’s happening in districts as a result of these budget decisions.”

Stephanie Winkler, president of the Kentucky Education Association, said policymakers in Frankfort should overhaul the state’s code to create some dedicated revenue sources for school funding and propping up Kentucky’s struggling pension systems.

“We as educators are sort of the groundwork for all other professions,” Winkler said. “We create all other professions by helping students achieve their goals to be whatever they choose to be. Without investing in education, we’re doing a disservice to our local communities.”

But tax reform has historically been a difficult sell in the General Assembly, and even if the state found new revenue for schools, McDaniel said that money would not make much impact in the budget that starts July 1 and runs through June 30, 2020.

“People want to talk about new revenue, and that’s great, but the practical reality is that anything we would do for new revenues simply will not take effect for most of this biennial budget, so we really are left with not a lot of good options, and cuts are the vast majority of what we’ll have to go through,” he said.

McDaniel said that while school districts may face difficult decisions in the months ahead, he hopes they’ve planned accordingly.

Still, Huff said cuts to SEEK would be a tough proposition for many lawmakers.

“The schools are already struggling with the numbers that they have now, to the point where some are facing closure within a few months, maybe six months or some I think three now,” Huff said.

“There is no way that we can touch that funding. They better find somewhere else to mess with the funding because we’re talking about the kids and the children of the commonwealth and they are our only hope, and we’ve got to ensure that we offer them the best.”

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