By Greg Bird
Governor Matt Bevin’s budget proposal presented last week during his State of the Commonwealth Address included several cuts to the two-year budget, which he said would help fund the state’s failing pension systems.
“The focus of this budget is to get our financial house in order,” Bevin said.
As opposed to deep spending cuts to state agencies, the Governor proposed shutting down 70 state government programs and reducing some state agencies’ budget by 6.25 percent.
Bevin has admitted the proposal is a “conversation starter” to begin talks on the upcoming budget, many education officials in Kentucky are worried over how some of the proposed cuts could hinder local school districts.
The Governor’s proposal has met with strong reactions from educators across Kentucky as they say his plan to cut funding for transportation would have a negative impact on local school districts.
While the Governor states per-pupil based Support Education Excellence in Kentucky (SEEK) funding will stay the same, the overall Department of Education’s budget faces a 4.8 percent decrease, including an approximate 62 percent cut in transportation funding.
The Governor stated he expected local school districts to dip in to their contingency funding and cut their administrative costs to offset the loss.
“We’re going to ask these districts to tap these funds,” he said. “These are exactly the times they were meant for, times that try men’s souls.”
Michael Cash, Superintendent of the McCreary County School District, said the proposed budget – if passed as is – would have a catastrophic affect on local schools and could force the District to make some drastic decisions in the near future.
“It is just a grim outlook on how we are going to survive,” Cash said. “It is a bleak outlook for public education in Kentucky as a whole.”
Cash said school districts in Kentucky are mandated to maintain two percent of their operating budget in a reserve fund, to be used for emergencies and unexpected expenses. The McCreary County School District voted a few years ago to increase that reserve to up to five percent. Currently the reserve stands at about $1.4 million, Cash said, but that would be quickly eaten up by the prospect of additional transportation costs.
He noted the District is supposed to be allocated about $1.8 million in funding to help with transportation, but that full amount is never realized and for the current year only about $1.5 million was delivered – costing the District about $400,000. Additional cuts to the funding could mean the District would have to pay about $1.2 million additional in transportation alone, leaving only about $200,000 in contingency.
The transportation funding raises a strong concern that the School District may have to look at eliminating providing busses for students. State law does not mandate schools provide transportation for any student other than special needs students.
“Local taxes were meant to supplement state and federal funding,” Cash said. “Now it is looking like the Governor wants to put more of the burden on local taxpayers.
Cash also says the Governor’s claim that SEEK funding would be unaffected is incorrect as well. He points to an analysis provided by the KDE, which takes in to account all the areas affected by the budget proposal that impacts SEEK calculations, that shows the funding would actually decrease by 4.1 percent next year under the Governor’s plan.
Other proposed cuts and expected expenses would push the District’s budget in to the red, Cash claimed.
Eliminating Professional Development, textbook funding and the Community Education Grant, along with funding for teacher internships (three of the proposed 70 program eliminations) would take the reserve figure to almost zero.
Adding in the $451,000 the District is expected to pay to the state teacher retirement system puts the school system in nearly a half a million dollar hole without cuts elsewhere.
“The sad fact is other costs are coming up, while funding is disappearing,” Cash said.
Cash points to the proposal that local school districts take up more of the burden on employee health insurance and benefit costs, which amounted to about $4.9 million last year.
He also noted the drastic decrease in Payment in Lieu of Taxes (PILT), which decreased from about $500,000 to just $12,000 this year and the loss of unclaimed mineral taxes have hurt the budget.
Another part of the Governor’s proposal is for Districts to cut down on administrative salaries to save money.
Cash says there is very little to cut in that area anymore, as reductions have already taken place over the past two to three years.
“We have cut District Administrative costs in the Central Office from about 4 percent of our budget to 2.8 percent. The Department of Education conducted an audit when I took over this office and said we have cut it to the bone and have no where else to go.”
According to the financial report the District spent $1.5 million in administrative salaries last year, which amounts to about 4 percent of the total budget.
“Overall administrative salaries (Principals, counselors, etc.) have dropped by nearly 3 percent since 2014,” he added. “These aren’t non-critical positions.”
“Our budget is more lean and targeted than it ever has been in the McCreary County School District. I don’t know what more we can do.”
According to the District’s financial report published last fall, only about $3 million of the District’s $34 million budget comes from local tax dollars. The majority of the funding comes at the state level with about $23 million and $6 million from federal sources.
Another byproduct of the ongoing budget discussion is the impact it has on the budget planning process for local school districts.
“We just don’t know what it is going to be,” Cash said. “I am supposed to present a draft budget to the Board of Education this month. But it will be useless at this point because we just don’t know.”
“If the cuts are coming we need to know as soon as possible because we have mandated timelines on certain things.”
He noted if positions need to be cut, by law, he has to give ample notice to those affected.
“The Board of Education has been generous in recent years reducing the student/teacher ratio and funding positions such as music and art,” Cash said. “If this budget passes we may have to look at cutting positions.”
While Cash says he believes every position in the District is important and impacts instruction and student safety in some way, but if the cuts pass the legislature the District would have to look at eliminating jobs and other expenditures.
“We may have to reduce funding for travel for academic competitions, or eliminate school resource officers or non-core teaching positions,” he said. “None of those options would be popular.”
“If you look back at the academic success we have made over the last years – that is in jeopardy.”
Cash states he and most other superintendents in the state have contacted their representatives in the legislature to voice their concerns over Governor Bevin’s proposal and urge teachers and parents to do the same.