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Kentucky Schools Face Greater Fiscal Woes Beyond 2013-14, State School Board Told

This article first appeared at KY Forward and is written by Brad Hughes of the Kentucky School Board Association.

Kentucky public schools are reopening for the 2013-14 year with tens of millions of fewer federal dollars for everything from intervention aid for struggling students to fewer special education staff and reduced after-school programs. The impact of the Budget Control Act may be relatively limited this year, but that will rapidly change unless Congress alters the long-range plan of $1.2 trillion in spending reductions.

That in a nutshell was the message Kentucky Department of Education number crunchers gave to the Kentucky Board of Education Wednesday morning in Frankfort, part of the state board’s annual planning retreat.

Associate Commissioner Hiren Desai and Charlie Harman, the agency’s budget director, provided a detailed report on nearly a dozen federal programs in which funding is being reduced between 4 percent and 8 percent this year. In the short term, the pain will be minor.

“Right now, I don’t think district finance officers and superintendents are thinking about sequestration because they are still using last year’s money,” Desai said. He noted that the state’s school districts still have $140 million of the roughly $500 million in federal funds appropriated last federal fiscal year for programs such as Titles I and II and Individuals with Disabilities Education Act.

Federal funds may be spent within 27 months of allocation, “So they are using the money now that’s being cut by sequestration,” Desai said. “Next spring, they’ll notice the impact.

“When they start putting together staffing plans for next year, I suspect there will be more cuts,” he said. “Next spring is going to be interesting. As the General Assembly is preparing (the 2014-16 state) budget, we’re going to have districts seeing the impact of sequestration.”

And Desai warned that unless Congress changes the rules of sequestration, the eventual loss of federal funds to Kentucky classrooms will be “unrecoverable.”

“If sequestration is really for the next 10 years, we’re looking at federal funding being cut by 50 percent a year then,” he said. “There’s no amount of tax reform or anything else that will restore those funds.

“One thing is clear. If sequestration continues beyond this year, you fall into a cycle and you’ll never recover those federal funds,” Desai said.

At the same time, Desai said sequestration is only one of four budgetary factors pinching school budgets this year – and probably having the least effect.

“At the end of FY 2013, all of the federal stimulus funds – $136 million for Edujobs – ended,” he said. “A lot of districts in the more rural parts of the state are facing declining enrollment, and that means fewer SEEK dollars. And even though SEEK funding overall has been flat for several years, the per-pupil amount had fallen.

“A lot of superintendents and finance officers have done a yeoman’s job mitigating the impact of sequestration this year. But when you talk about all four factors together – that’s really putting pressure on our schools,” Desai said.

Desai recently joined Education Commissioner Terry Holliday in a similar briefing for the General Assembly’s interim joint Appropriations and Revenue Committee. Both officials felt state lawmakers wanted to focus on the problems caused in Washington, D.C., and overlooked the impact of their own budgetary actions.

“The legislators asked if we’d contacted the Kentucky congressional delegation,” Holliday said. “We wrote them a letter, I talked to our two senators. I would characterize their responses this way: They pointed the finger at the other side (of the political divide in Congress) and said, ‘Our country is in trouble and we need to do something but the other side won’t let us do it.’”

Desai is worried that state legislators seem to think schools’ fiscal struggles are all tied to sequestration.

“We’ve had $26 million in federal cuts in one year. We’ve had $100 million in state cuts since 2008. Which is worse?” he said.

Some members of the state board of education voiced their frustration over the topic by doing a little finger pointing of their own.

“This is a problem at every level,” said KBE Vice Chairman Roger Marcum, a former Marion County superintendent. “Our (state) House and Senate leaders say there is no will to address tax reform. At the federal level, we’re getting little or no response. Then look what’s happening at local districts who are hesitating to take the 4 percent (maximum annual local property tax revenue increase) that they can.”

Brigitte Blom-Ramsey, a former Pendleton County school board member, tried to visit members of the Kentucky Congressional delegation on sequestration and other education issues earlier this year.

“We had a difficult time getting in, and some (members of Congress) are not so interested in the impact of federal funding cuts on education at the state level,” she said. “It’s all being cost-shifted down to the local level by the feds and by the state.”

Marcum and KBE Chairman David Karem of Louisville said lawmakers in Frankfort and Washington, D.C. could be motivated to address school funding if they heard an aggressive message from those inside and affected by school budgets.

“If those in the system could speak up more about how it’s impacted not just kids but their own homes with no pay raises in five years, limited retirement benefits…you would think that would be motivation in itself for folks to speak up,” Marcum said. “A lot of folks just think it doesn’t do any good to talk to my local senator or representative or congressman. They’ve given up any notion there will be a response.”

Karem was more optimistic of change if more taxpayers make school funding a public issue.

“You have tens of thousands of people employed in the state of Kentucky in elementary and secondary education. That body of power, if it could ever be harnessed, could turn around the state legislature,” said the former state Senate majority leader. “If you had 25 people in a House district (talking to a state representative), he or she thought there was a groundswell movement. Imagine if you could get all of these people to communicate to their legislators what could happen.”

Today’s KBE annual retreat also included a review of this year’s TELLKentucky workplace conditions survey of certified staff and an update on the Districts of Innovation initiative in four school systems. Tomorrow, the state board will have its regular meeting with an agenda that includes action on regulations implementing proposed Kentucky Core Academic Standards for science and new annual training requirements for members of the state’s 173 local boards of education.

Tomorrow’s meeting will be streamed live on the KDE website. The retreat discussions were not.

Brad Hughes is director of member support for the Kentucky School Boards Association and writes for the association’s news service.

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