School Leaders Waiting For Signals From Frankfort

School leaders seem happier with the latest proposed state budget. But they’re not as comfortable with how it’s being paid for. Last month, the Harrodsburg Herald reported the budget proposed by Gov. Matt Bevin could force 120 of Kentucky’s 173 school districts—including Mercer County—into insolvency.

In contrast, school leaders are much happier with the House budget bill, which keeps K-12 programs safe from the 6.25 percent cuts originally proposed by Gov. Bevin and gets rid of proposed cuts to student transportation funding. The bill would allot $59.5 million to cover health insurance for members of the Kentucky Teachers’ Retirement System who retired after July 1, 2010, but who still aren’t eligible for Medicare. The House budget also increases SEEK (Support Education Excellence in Kentucky) funding for public schools from $3,981 to $4,055 per pupil for fiscal year 2018-19.

At last week’s meeting of the Mercer County Board of Education, Superintendent Dennis Davis called the proposal “good for schools.” However, the Senate had not yet passed their budget, and Davis and other school leaders are waiting to see what changes will be made.

“We are waiting very anxiously to see what that budget is going to be,” Davis said.

Mercer Finance Officer Amber Minor said the House bill is “significantly better” than Gov. Bevin’s original proposal. “It would be great for us,” Minor said. “I hope the new budget is what we go off of.”

While Minor likes the budget, she does not like that part of the funding comes from state employees’ health insurance fund. Legislators plan to transfer $481 million from the fund to cover revenue shortfalls elsewhere. It’s estimated the transfer could cause premiums to increase 50-percent within two years. In a Louisville Courier-Journal article, the head of the Kentucky Association of State Employees called the budget transfer “a tax on state workers.”

Minor notes that this type of fiscal maneuver is exactly how Kentucky’s ailing retirement system got in the shape it’s currently in. “They never funded it fully and they borrowed off it,” she said.

She is also worried about a possible repeal of the inventory tax, which, along with personal property taxes, contributes a significant part of the school district’s local funding. Minor said she’s heard about the proposal from the Kentucky School Board Association, but has been unable to draft an analysis of how the repeal would affect school funding.

Kentucky is one of a small handful of states that taxes business inventories and Bevin has frequently called for the tax’s elimination. However, there is no consensus on how to replace the lost revenue for school districts.

“I’m not a legislator and I’m not the governor,” Minor said. “I think they need to look at new revenue instead of taking away from others.”

She said the state government needs to look at new ways to fund vital services. “We’re not asking for them to take away from others in the state, we’re asking for new forms of revenue,” Minor said. “We’re asking for tax reform.”

Considering how late it is in the legislative session, that doesn’t seem likely. Minor and her staff must submit their tentative budget by May 30.

“At this point, we’re preparing for the absolute worst and hoping for better than that,” Minor said.

The Mercer County Board of Education will hold a budget work session on Wednesday, April 11, at 4:30 p.m.

The next regular meeting will be Thursday, April 19, at 5:30 p.m. at the Harlow Education Center.ning and Zoning Commission will be Tuesday, May 8, at 5:30 p.m.

Editor’s Note: This story was written before the Senate unveiled their version of the state budget on Tuesday.

To learn more, check out this week’s issue of the Harrodsburg Herald.