KY school districts must make cuts now to deal with $40.6 million shortfall, KDE says

Kentucky school districts will have to adjust their current budgets now to deal with a $40.6 million shortfall in state funding this school year, Kentucky Department of Education budget officials told a legislative subcommittee Tuesday.

The shortfall is in funding from Support Education Excellence in Kentucky, a formula-driven allocation model that provides money for Kentucky’s K-12 public schools. The formula includes factors like transportation costs and special needs students as reported by districts.

Matt Ross, an associate commissioner in the Office of Finance and Operations for the Kentucky Department of Education, said there is a $14.7 million shortfall in the parts of SEEK that are required by law to be paid to districts, and an additional shortfall of $26 million for funding to public school districts that should be paid if funds are available.

Chay Ritter, director of Kentucky’s Division of District Support, said districts will need to make cuts to accommodate the shortfall. For some districts, the cuts will be just a “hiccup,” he said, while for others, the cuts will be “pretty rough.”

Kentucky has 171 school districts. It was not immediately clear Tuesday how state officials would determine how much each district needs to cut.

Fayette County Schools’ officials were on Tuesday confirming with the Kentucky Department of Education how the shortfall will affect the district. The district’s total budget for this school year is $817 million.

Jefferson County Public Schools will have to make a cut of $1.3 million, Ritter said.

The shortfall will appear in the April through June 2025 SEEK payments, the education budget officials said.

SEEK funding projects were made in the fall of 2023, and state officials said some conditions changed, leading to the shortfall.

Commissioner of Education Robbie Fletcher told lawmakers that in the previous three years, there was an excess in SEEK funding of about $250 million. The excess goes back into the state’s general fund.

Fletcher said one of the reasons for the current shortfall is that there are 4,000 more students enrolled than department of education officials had projected. He said the English Language Learners population had “exploded,” and the number of special needs students had also increased.

Fletcher said expected increases in property value assessments did not occur.

The state budget director’s office and the Kentucky Department of Education work together on the projections, Fletcher said.

Ritter said about $2.8 billion is spent on the Support Education Excellence in Kentucky program. In total, $11 billion is spent on K-12 schools in Kentucky, including local taxes, grants and other funding that the General Assembly appropriates in the budget bill, Ritter said.

Property assessments, average daily attendance, and exceptional child counts are all part of the projections, he said

Members of the House Budget Review Subcommittee on Primary and Secondary Education and Workforce Development — including Committee Chair state Rep. Kim Banta, R-Fort Mitchell, and state Rep. Tina Bojanowski, D-Louisville — asked Ritter why special education enrollment numbers were off in the projections.

Ritter said he was talking to officials in Kentucky’s larger districts, including Fayette, about the differences.