Thursday, May 13, 2010

Q-and-A on the new budget proposal (What did the Governor just say?)

There may be a thaw in our previously frozen budget process.  Yesterday, Governor Beshear offered a proposal that combines key elements of the House bill, the Senate amendments, and the priorities set in his original January budget recommendations.  At least initially, legislative reactions sound fairly positive.

What happens to the SEEK guarantee in the new proposal?
For SEEK, the proposal says:
• Primary education funding formula: Funds the House-proposed SEEK per pupil guarantee of $3,845 in FY11 and $3,881 in FY12, plus the value of one instructional day.
• Instructional days: Keeps required instructional days at 177 days in both years. The state would fund one of the two days and local school districts would fund the other.
Why is 177 days an accomplishment?
Most other states require more instructional time than we do.  For years, Kentucky has required just 175 days, and our permanent statutes still only list that low number. In 2008, our budget bills started requiring and funding two additional days.   The thing is, budget bills only apply for two years.  If we don't put the additional two days in the next budget, they disappear.

If the state funds a guarantee of $3,845 plus one instructional day, what will the total guarantee be?
I think it will be $3,866. 

The commissioner has offered $17 million as the cost of one day, which I estimate as adding $21 to the guarantee.* $3,845 plus $21 is $3,866.

$3,866 is also the guarantee amount used for the 2008-09 school year and then frozen and used again for the current 2009-10 school year.  Is that a fluke? An ironic surprise? The result of careful number-crunching by Frankfort experts?  I can't answer that part.

Bottom line: I think the plan is really to flat-line SEEK guarantee for another year.

Does that mean districts will get the same state SEEK funding next year?
No, districts will get less state funding.

For one thing, the state never pays the full guarantee amount. It only pays the difference between local revenue (the required 30¢ per $100 of taxable property) and the guarantee per pupil.  The local revenue is projected to go up, so if the guarantee is flat, that means the state payments will go down.

This year, the number of students in average daily attendance has also gone down.  That means that that keeping the same guarantee will cost the state about $14 million less next year.

What's happening to other P-12 programs, like preschool, textbooks, and professional development?
I think they'll be taking a 3.5 percent cut for 2011 and a 4.5 percent cut for 2012. That's the standard cut the Governor proposes for most agencies.  In his past proposals, when the Governor has named an overall reduction rate for the rest of state government, he's included those programs. SEEK was protected, but not the other categorical programs that serve students.  As an informed guess, I think he means the same thing this time, though I'll be delighted if it turns out otherwise.

What's happening to the universities, KCTCS, and financial aid?
Postsecondary education is slated to lose 1.4 percent for 2011 and 2.4 percent for 2012, on top of repeated cuts in the last few years.  That means there's no relief added for our need-based financial aid program, even though we know eligible students are being turned away for next year.

What about the state agencies themselves?
The Kentucky Department of Education and the Education Professional Standards Board are likely to be taking the 3.5 percent and 4.5 percent cuts to their staff and internal operating funds, along with other agencies in state government.

The Council for Postsecondary Education could be in the same boat or it might be included in the 1.4 and 2.4 percent cuts for the rest of higher education.

Any permanent lessons?
This new proposal, like its predecessors, focuses on the SEEK guarantee.  SEEK is the heart of Kentucky education funding but it's not the whole story. Beyond SEEK, education funding includes:
  • Preschool and other supports for students
  • KDE and EPSB capacity to support districts, schools, and teachers
  • Higher education and financial aid
All of those other elements will lose ground under this proposal--even if they lose less ground than other state services.

Also, within SEEK, the guarantee is always paid partly by local money. This year, the state is counting on locals to increase their share of the total.  That continues a long-term trend of the state carrying less of the load.

When you hear about SEEK, ask about other programs. When you hear about the SEEK guarantee, ask about the share of the guarantee that will be paid with local dollars.

* To get the $21 per pupil estimate for adding one day to the SEEK guarantee, I divided the $17 million by average daily attendance and the needed add-on amounts for students with special needs.

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