Time for Bold Action to Ensure Fiscal Strength

As we prepare for the General Assembly’s 2012 session, the primary concern I am hearing from teachers, principals and superintendents is the challenge of doing more with less.

Certainly, this is a challenge that many families are facing every day. The challenge for Kentucky educators is that 2009’s Senate Bill 1 (SB 1) required major reforms in learning standards, assessments, professional development and accountability.

The vision of SB 1 is very important for Kentucky children and Kentucky’s future. We must graduate more students from high school who are ready for college and career. Education certainly drives employment opportunities for our graduates, and employment drives our economy. However, the challenge remains to implement the requirements of SB 1 at a time when we see dwindling resources for instructional materials, early childhood opportunities, Family Resource and Youth Services Centers (FRYSCs), extended school services, professional development and jobs.

I am proposing a three-pronged method to deal with the challenge.

1. Productivity and efficiency must be our first approach to dealing with fewer resources. Already, we are seeing Kentucky school districts decreasing energy costs through energy management and energy education initiatives led by the Kentucky School Boards Association. Recently, U.S. Secretary of Education Arne Duncan spoke at a Kentucky conference that encouraged schools and districts to continue to look for ways to improve productivity and efficiency. The Kentucky Department of Education (KDE) will convene school district officials in the early part of the year to decide upon four to five key support processes in our schools that we can look at to determine costs per student and develop best-practice strategies to reduce operation costs so dollars can be redirected to support teaching and learning.

2. Redirection of dollars also must be a key strategy. We must look at the hundreds of millions of dollars that flow through KDE and determine which of the programs add value to our vision of college and career readiness. During the 2010-11 legislative sessions, I asked for flexibility with these flow-through dollars. I will once again ask for flexibility and ask members of the General Assembly to focus dollars toward SB 1 and the college- and career-readiness strategies. Also, through the federal No Child Left Behind waiver, school districts will have flexibility to utilize federal dollars in more effective ways to increase student learning.

3. Finally, I believe it is time to look for additional sources of revenue. Over the last two years, KDE has implemented a strategy to seek foundation and grant dollars. While we were not funded fully from our Race to the Top grant, we will receive $17 million in Round 3 to implement SB 1 strategies. Also, we have seen significant support from the Gates, Hewlett, Stupski, Carnegie and Wallace Foundations. While external dollars are appreciated, they cannot be sustained. Kentucky must look for recurring sources of revenue to sustain our efforts. Kentucky can no longer cut funding for basic needs like preschool, instructional materials, FRYSCs and other core programs. For every dollar we cut today, we are damaging the future of children and the future of Kentucky.

While the 2012 session does feature key issues such as redistricting, and an election year is looming, I feel it is important to ask for collaboration of elected officials to support education. Pursuant to 2010 budget language, I have asked Governor Steve Beshear to utilize available funds to fill the SEEK shortfall that we have announced today.

I’ve notified our district superintendents that we believe the SEEK shortfall will be approximately $58 million, based on multiple factors including higher attendance/growth and lower property assessments.

I hope that readers will join me in advocating for children and for the future of Kentucky. Our Governor and General Assembly strongly support education, and they will need our support and encouragement as they tackle these three strategies for supporting education. No one strategy can stand alone. This must be a coordinated effort to implement all three strategies. I look forward to discussion, debate and action over the next few months.

Education Finance

This week, I had the honor to meet with the Budget Review Subcommittee on Primary and Secondary Education, which is co-chaired by Sen. Vernie McGaha and Rep. Tommy Thompson. I was asked to present about three key issues, and this edition of my blog provides highlights of the meeting.

Issue 1 was impact of budget cuts on local school systems – For FY09, school districts saw significant reductions in Flexible Focus dollars. Flex Focus dollars provide monies for extended school services, preschool, professional development, textbooks and safe schools. In addition to budget cuts made through the enacted budget, there was a statewide 2 percent cut in late FY09 that impacted school districts. This budget cut amounted to about $6.1 million and was made to the textbook line item based on recommendations of superintendents. For FY10, the Flex Focus reductions and the textbook reduction were carried over, and, in July, we were asked to prepare an additional 4 percent budget reduction. This budget reduction also was made to the textbook line item, in the amount of $12.9 million. The bottom line to school districts is that Flex Focus dollars have been reduced by 36 percent, on average statewide. A document showing each district’s allocations for Flex Focus and other items is available here.

Issue 2 dealt with the funding streams from the American Recovery and Reinvestment Act (ARRA) – The information provided to the subcommittee can be accessed here. The key concern for everyone is that the State Fiscal Stabilization Funds that were used to maintain FY10 SEEK base of $3,866 per student and also will hopefully be used to maintain SEEK funding for FY11 will not be available in FY12. The General Assembly and Governor Beshear will be dealing directly with this issue as they develop the biennial budget for FY11 and FY12.

Issue 3 dealt with fiscal stability of school systems – The Kentucky Department of Education does monitor the fund balance statements of local school districts. The general fund balance and child nutrition fund balance are tracked separately. School systems are having to deal with state budget cuts and numerous obligations (sick leave pay outs, construction, unfunded mandates, school-based council carryover funds and more), and they are having to prepare for the future when federal dollars may not be as available as they are currently. I would encourage all local boards to take the advice of the Kentucky School Boards Association and hold at least one meeting per year where the local community is informed about the need for a fund balance and projected use of the funds. Also, local superintendents should keep their legislative delegations informed about the same.

We are working very hard at KDE to review all expenditures. KDE has seen an overall 28 percent reduction in funds since FY08. We are looking carefully at all programs to ensure they are effective and efficient. We also are looking at outside funding through competitive programs such as Race to the Top and monies from foundations. There are signals of economic recovery; however, prudent planners will continue to work to ensure expenditures are focused on the core mission of schools, which is learning.