Besides, Stumbo might raid the fund

This from the Winchester Sun:

Schools face $1.5M deficit

Clark County Public Schools are already facing financial woes for the 2010-2011 school year.

A draft budget for the 2010-2011 year was presented to the school board at a special meeting Wednesday night. It includes a deficit of $1,553,677 and a contingency plan under the required 2 percent.

Consultant Dr. Bob Wagoner and Clark County Financial Director Stacey Clark presented the budget, and Wagoner encouraged the board to find a way to cut expenses by $800,000. Wagoner said that if the deficit is dealt with over two years rather than all at once, it would be easier for the district to handle.

"It is going to require some very difficult decisions by the board,” Wagoner said. “. … If it is not tackled, short of winning the Powerball, there’s not going to be a good way to do this without doing damage to your instructional program.”

Wagoner said that before the budget is approved, the contingency fund would have to be increased as well.

Although Wagoner said that having 5 to 8 percent in the fund is preferable, the current financial situation will not allow that....

And this from the Daily Independent:

Schools leery of one possible fix for budget

Proposal would take away districts’ rainy day funds

A proposal for the state to turn to school district rainy day funds as budget bandages has area administrators nervous.

The proposal is one of five possible fixes for Kentucky’s red-ink predicament and, if adopted, would fund deficits in the state’s education budget with money districts keep in reserve for emergencies.

“It concerns me because it’s not extra money. It’s money we hope not to have to use but it’s real money,” said Lawrence County School District Superintendent Mike Armstrong.

While worrisome, the proposal floated by House Speaker Greg Stumbo doesn’t come as a surprise, Armstrong said. Stumbo told superintendents at their recent convention that “anything and everything is on the table,” Armstrong said.

The proposal may not be legal because there is no way to determine how much of a contingency fund is state money and how much is local, said Greenup County School District Business Manager Scott Burchett. Burchett is worried, anyway, because the $780 million in gambling revenue Gov. Steve Beshear had been counting on in his
proposed budget faces certain death in the General Assembly.

That leaves a hole the state will have to fill somehow, Burchett said. “That makes us real nervous,” he said...