Thursday, February 1, 2018

Health, Transportation Cuts, and Where They Could Hit Hardest

| Post by Susan Perkins Weston |

Governor Bevin’s proposed budget would require school districts to pay larger shares of transportation and health costs out of local funds. To explore those changes, I used 2016-17 data to estimate what new costs each district would face, and I compared those figures to the fund balance each district had on hand at the end of June 2017. That approach suggests that:
  • Six districts could wipe their whole fund balance to pay the first year of added costs, putting them in the red by June 2019
  • Nineteen more districts could empty their fund balances by June 2020 to pay the first and second year of costs
The potential harm is clustered in our eastern counties, in rural south-central Kentucky, and at the western tip of the commonwealth, as shown in the map below. The pattern has much in common with maps of other economic challenges, and it shows these how these cuts can make those challenges worse. Bluntly, the impact on students will differ by region.
The districts where the 2017 fund balance could not cover estimated 2019 added local transportation and health costs are Ashland, Elliott, Fulton, Leslie, Pike, and Powell.

Districts where that balance could not cover estimated 2019 and 2020 added costs are Bell, Breathitt, Carter, Clinton, Edmonson, Fairview, Graves, Green, Hart, Lewis, Ludlow, Metcalfe, Paris, Raceland Ind, Russell, Wayne, Whitley, Williamsburg, and Wolfe.

Yes, these are estimates, relying on data from last year. Yes, the districts in question may have bigger balances at the end of this year. Yes, they can aim to cut other costs and avoid insolvency over the next two years. And yes, I’m confident they’ll work to minimize the impact on student learning from those reductions.

Nevertheless, the danger here is serious, and the danger isn’t spread evenly over the state. The proposed health and transportation changes would likely push some districts into insolvency each year and the harm would fall on some Kentucky students more that others, based on where they live. That's very bad news for efforts to build excellence with equity statewide.

Notes for number lovers and policy wonks: 
1. The transportation estimates reflected only the gap between 2017 enacted funding and the 2019 recommendation. That is, the analysis did not consider the transportation costs that state underfunding has forced districts to pay for many years.

2. The health estimates reflected the gap between requested funding and recommended funding for each year.

3. Prorating reductions takes the most from students in districts that need the greatest state help. I used that method because the state has used it repeatedly. I consider it both indecent and unconstitutional, but it's still what past practice leads me to expect.

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