Funding gap between Kentucky school districts at unconstitutional level, report says

Funding gap between Kentucky school districts at unconstitutional level, report says
Published: Aug. 25, 2023 at 3:47 PM EDT
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LEXINGTON, Ky. (WKYT) - According to a new report by the Kentucky Center for Economic Policy, the funding gap between Kentucky’s poorest and wealthiest school districts now surpasses the level that is declared unconstitutional.

Nearly three decades ago, the issue was addressed in the Kentucky Supreme Court. Since then, the gap has widened.

The equity gap between the poorest and wealthiest school districts in the state began to shrink after 1990, but that trend started to change gradually, and according to the most recent report from the KY Center for Economic Policy, that per-pupil gap has reached nearly $4,000.

“We’ve been tracking this since 2017, so we know the trend is happening every year where the gap would grow a little bit bigger, and we knew there would be a point in which we surpassed where we were at the point that it was declared unconstitutional,” said Jason Bailey, the Executive Director for the Kentucky Center for Economic Policy.

Bailey says this is a troubling landmark. He says unless the Legislature puts more money back into education, the trend will continue.

“It’s harder to have an equal shot when there’s less resources, fewer teachers, fewer bus drivers, fewer after-school programs; the textbooks are out of date,” Bailey said. “Everything that happens when you don’t have money.”

He says there is a broad difference between the rural areas with low wealth, mostly in eastern Kentucky and areas with higher wealth, mostly in central Kentucky.

In 1989, the Kentucky Supreme Court ruled that their per-pupil gap was inequitable. In 1990, the Legislature created the Kentucky Education Reform Act. Bailey says it included tax increases that paid for putting more money into schools. Now, he says it’s even worse than it was then.

The report also says the Office of Education Accountability (OEA) submitted a school finance report each year between 1992 to 2006. In 2006 they stopped their yearly report and Bailey says by then, the gap had already started to increase.

“When your property wealth is lower, you can pass the same tax increases, but the school district just raises far less money. These districts have tried to make up for the state cuts by looking at local taxes, but it just doesn’t generate the revenue.”

Bailey says that the General Assembly can address these issues in the upcoming session.

“They have $3.7 billion sitting in the rainy day fund, so in the next budget they can take a big stride towards moving things back in the right direction. That would be the first step. To do that, they’d have to forgo more tax cuts, and so that’s the big choice in front of the next session.”

According to this report, the General Assembly reduced the income tax rate to four and a half percent at the start of this year, and next year, in 2024, it will be reduced to four percent without making any cuts to the budget. It also shows that those tax cuts could reduce general fund revenue by $1.3 billion per year by 2025.

You can read the full report from the Kentucky Center for Economic Policy here.