Gov. Beshear: no mid-year SEEK cut as part of revenue shortfall plan

Excess SEEK coming this spring

This from Brad Hughes at KSBA:

Kentucky school leaders, fearful of mid-year funding cuts to offset a $100 million state revenue shortfall, got a double dose of good news Monday from Gov. Steve Beshear: not only will there be no cut in the current fiscal year’s SEEK allocation, the state expects to give districts an additional $30-$40 million in April, May and June to offset non-SEEK cuts in statewide K-12 spending.

“The bottom line (is) that every district will see budgetary relief and most will be made whole (from earlier state cuts),” Beshear said in a Capitol news conference. “It will help us to continue to maintain our commitment to our core priorities – the greatest of which is educating our children.

“While this is good news, a word of caution to our school districts: conserve your funds as much as possible. The challenges confronting us in the next two year budget are formidable,” the governor said.

Let's hope House Speaker Greg Stuimbo got the memo. By contrast, he has advocated capturing school contingency funds. If that were to come to pass, it would serve as a major disincentive to effective planning and frugal habits, both of which Beshear advises. On the other hand, Stumbo's promotion of tax reform is the right idea.

“We drew a line in the sand and preserved SEEK last June. In the budget passed last summer, I made a promise to our principals, our teachers and our students. I told them that if there proved to be an overage in the SEEK allocation in this fiscal year, that I would make sure that that money went back to the individual school districts and not to the General Fund,” Beshear said.

“The good news is that there will be extra money this year. We won’t know the final number until late February, but it will be between $30 million and $40 million. That money will not be swept back into the General Fund, but will be sent back to districts through the Department of Education’s SEEK formula,” the governor said.

“We estimate that the additional funds distributed to the schools through the SEEK formula will more than offset the impact of the 3 percent cuts in every district in this state, (and) in most districts, will offset the cuts in non-SEEK funding made last June.
“By distributing the additional SEEK funds through the formula, districts will be able to manage at the local level in a way to best meet the needs of the schools and their students,” Beshear said.

Education Commissioner Terry Holliday joined Beshear at the news conference and praised the governor for his decision.

“The future of Kentucky is in our classrooms today. By holding SEEK harmless in this process and by committing the excess SEEK dollars to help districts become whole once again, we have once again as Kentuckians shown our support for education,” said Holliday. “I will be sending an e-mail and directions to local superintendents this afternoon, describing where the 3 percent cuts are and the process we will follow to distribute the excess SEEK money.”

The governor announced a $108.3 million budget reduction order for the current fiscal year to include a cut of 3 percent to state agencies, including the Department of Education. The major elements of the budget change are $49 million in spending cuts, $25 million in federal stimulus funds and the remainder in excess, unbudgeted agency funds.

Holliday said the KDE funding cut — $10 million – will be done by replacing some planned state spending on technology programs with federal funds; delaying until next year some $4 million in Read to Achieve and Math Achievement Grants; and capturing the remaining $2 million in the state textbook account.

“What we’ve done is to cut without affecting people,” the commissioner said. “The extra SEEK dollars will more than offset these cuts and the cuts from last June.”

Beshear noted that the current biennial budget gives districts greater flexibility to use state funds than had been the case previously. Both the governor and Holliday said by returning the excess SEEK funding through the SEEK formula, that flexibility is determining where to spend the money is further increased.

In terms of the upcoming biennial budget efforts, Gov. Beshear said, “I’m going to try every way possible to preserve SEEK in next two year budget. That is my highest priority. I’ll do everything humanly possible to avoid cutting SEEK.”The governor will present his proposed two-year budget to the General Assembly on Jan. 19.

This from The Commish's Monday email to Supts:

Governor’s Budget Reduction Order and Impact on Education

As indicated in the Governor’s budget reduction order that was signed this afternoon (see attached press release and attachments above), the Kentucky Department of Education (KDE) will be implementing a 3% budget reduction plan rather than a 6% plan. The reductions that will be implemented by the plan are as follows:

Education Technology - KEN $ 765,000
Education Technology - KETS $ 975,000
Family Resource Youth Services Centers $1,714,300
Partnership for Successful Schools $86,000
KDE Assessment Funding $45,000
Read to Achieve Carry-forward Dollars $3,000,000
Math Achievement Carry-forward Dollars $1,000,000
Textbooks $2,016,400
Life Insurance $399,900

TOTAL CUTS $10,001,600

KDE has made every effort to minimize the impact of these cuts on school districts. The Governor’s good news is that we anticipate excess SEEK funding will be available in the last quarter of this fiscal year to adequately offset the impact of these cuts. The excess SEEK funding will be received as part of the April, May and June SEEK payments and can be used for any expenditure on which regular SEEK funds can be spent. Each district’s portion of the excess SEEK funds will be based on whatever its share of the current SEEK allotment is per House Bill 4, passed in the 2009 special session.

Regarding the cuts listed above:

· The Office of Education Technology will be coordinating with school districts to ensure that cuts to KETS and KEN funding will not directly impact technology hardware or services. We anticipate using one-time e-rate funding to ensure the dollars for these purposes continue to be provided for the remainder of the fiscal year.

· Excess SEEK funding may be used to offset cuts to FRYSCs and Textbooks.

· Cuts to the Partnership for Successful Schools, KDE Assessment Funding, Read to Achieve and Math Achievement will be taken from unobligated dollars and will not impact current grant dollars to school districts.

· The cut to life insurance costs is based on savings generated from a reduction in costs as of January 1, 2010 and will not affect school districts at this time.

Districts should be mindful that the excess SEEK dollars must be committed to appropriate programs by June 30. School districts may wish to commit some excess SEEK funding for qualified expenses for the next biennium, in the event that programs are not fully funded in the upcoming budget. Further guidance on spending excess SEEK dollars will be forthcoming from KDE.