KY Policy Blog

Kentucky’s Schools Face Funding Challenges as Kids Head Back to School

By Ashley Spalding
August 8, 2016

As kids return to school across the Commonwealth, they face continued frozen state funding that amounts to a reduction once inflation is taken into account. The lack of state funding increases for schools threatens educational gains Kentucky has made in the past and is leading to a growing gap between rich and poor schools.

Kentucky’s cuts among the biggest

Last year’s report on K-12 funding by the Center on Budget and Policy Priorities ranked Kentucky 6th worst in the nation when it comes to cuts in per-student core formula funding for local schools, which in Kentucky is known as SEEK — with a decline of 10.6 percent from 2008 to 2016 in inflation adjusted terms. Kentucky ranked 10th worst in per student funding cuts overall with a decrease of 12.1 percent since 2008.

Kentucky’s spending per student is also below the national average even when regional cost differences are taken into account, according to Education Week’s 2016 Quality Counts report.

School funding increases make a difference for students

As described in a recent NPR series on school funding, research is showing that school funding reforms — like the Kentucky Education Reform Act (KERA) in 1990 that created a funding system that provides more adequate funding for schools in low-income school districts — have had an important impact on student achievement. One study found  the achievement gap between students in high- and low-income school districts in states where funding reforms took place shrank by around 20 percent — unlike in states where there was no funding reform, where the gap grew. Another study found that when school spending increased by 10 percent over the 12 years a low-income child was in school they were less likely to be poor as adults, more likely to graduate from high school and saw a nearly 10 percent increase in low-income students’ adult earnings.

Kentucky’s gains are at risk

Kentucky has benefitted from its own school funding increases. As a result of past investments the state has made important progress in closing the high school graduation gap between low-income students and their more affluent peers, for instance. But these gains could be in jeopardy as the funding gap for lower income schools grows.

As noted recently by WFPL, despite important progress resulting from KERA the funding gap between Kentucky schools remains — in large part due to the lack of state funding increases in recent years, which has caused increased dependence on property tax revenue. While the SEEK formula ensures that more state money goes to lower income school districts, higher income school districts are able to raise more money through local property taxes.

The difference in per-student funding between the highest- and lowest-spending districts in Kentucky is $3,203 per student, according to the Quality Counts report. Meanwhile, the report showed a wide achievement gap between students who are eligible for free/reduced-price meals (60 percent of the student population in Kentucky) and those who are not.

Our previous analysis of these issues found  the same local property tax increase yields more than 10 times more funding per student in the richest Kentucky school districts than in the poorest ones. With state funding for schools flat-lined, schools in wealthier districts are therefore better able to cover increases in costs, and this greater reliance on local revenue accelerates the growing inequality between districts. According to the legislature’s Office of Education Accountability the gap in per pupil state and local spending between the richest 20 percent of Kentucky school districts and the poorest 20 percent was 40 percent higher in 2010 than it was in 2000.

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