Kentucky lawmakers, education officials discuss school funding shortfall
Robbie Fletcher, state commissioner of education, discussed the expected SEEK funding shortfall before a legislative committee Tuesday. (Kentucky Lantern photo by McKenna Horsley)
FRANKFORT — Kentucky Department of Education officials appeared before a House subcommittee Wednesday morning to discuss a state funding shortfall that could impact local school districts.
Last month, Education Commissioner Robbie Fletcher wrote in a memo that KDE is predicting a SEEK funding shortfall of about $40 million in the 2024-25 academic year, after 'a detailed review of preliminary data.'
On Tuesday, Fletcher told lawmakers that multiple factors that go into the SEEK formula, such as growth in the numbers of students and English language learners and increased property values, were different than what was projected. He called the process of arriving at estimates 'a consensus building process between the Office of State Budget Director' and KDE.
'We arrive at numbers on a very complex modeling and of course, this modeling happened in the fall of 2023, so … we're at the point now having to deal with what was projected in 2023,' Fletcher said.
The KDE officials appeared before the House Budget Review Subcommittee on Primary and Secondary Education and Workforce Development to discuss the data used to predict how much money the legislature should budget for schools under SEEK, or Support Education Excellence in Kentucky,
The formula determines the amount of state funding to local school districts. It has a base per-pupil funding allocation, along with additional funding for factors like transportation costs or the number of students in a district who qualify for additional resources like special education, free or reduced-price meals and English language assistance.
Fletcher wrote in his January memo that a SEEK shortfall previously occurred four times between fiscal years 2010 and 2024.
Of the $40 million shortfall predicted for this year, $14.7 million of the amount is required under state law. The remaining $26 million is designated for local school districts if funds are available.
According to KDE's presentation, if no action is taken on the shortfall, the $14.7 million would come out of monthly payments given to school districts between April and June. Chay Ritter, the director of the Division of District Support in KDE, gave an example of how Jefferson County Public Schools, the state's largest district, could be impacted if no action is taken on the shortfall. The district would receive $1.3 million less than the SEEK calculation this fiscal year.
'Making that cut for some districts, it may be a hiccup. For others, it may be pretty rough,' Ritter said. 'So, we're very conscious of that, and that's why we obviously try to avoid that.'
A presentation slide showed that estimates of various factors in the SEEK formula were within 0.2% to 10.1% of the actual cost. However, that can reflect millions of dollars within the total funding budget. The required $14.7 million is about 0.5% of KDE's budget appropriation, which is $2.7 billion.
Last Tuesday, Republican House Speaker David Osborne, of Prospect, reiterated comments he made after KDE raised the alarm on a possible SEEK funding shortfall. Osborne said it was a 'disturbing trend' to 'continue to see bad information and bad data.' He added that it has been 'several years now that we have seen inaccurate information.'
'I don't think it's intentional, but there's a disconnect somewhere in getting us good information,' Osborne said. 'That's all we have when we make budgets, is the information that we're given on those things. So for us to construct a budget, we've got to have good data going in.
Osborne said that the data comes from a combination of what KDE provides and what the legislature requests. When asked if that process could change in the future, Osborne said 'it very well could.
Meanwhile, Republican Senate President Robert Stivers, of Manchester, told reporters that he had been in conversations with KDE about the predicted SEEK funding shortage.
'There was a little bit of an undercount, but not much,' he said. 'There was an impact of increased property taxes. So, there were several components to this that caused us to have a shortfall, but it's not unusual that occurs because different things happen.'
Stivers said adjustments have been made before on SEEK funding throughout his time in the legislature.
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