Districts Brace for $15 Million shortfall in SEEK fund

Shortfall may compound financial picture next year

 This from Brad Hughes at KSBA:

Growing enrollment normally is a good thing for a school district. But for a state like Kentucky – in the middle of a two-year budget based on a smaller classroom headcount – more students means more financial headaches for district leaders. And the problem could worsen starting next July.

KSBA Pres. Durward Narramore Jr. with Holliday

In remarks in Louisville Friday to the KSBA Board of Directors and Sunday to attendees of the Kentucky Association of School Superintendents winter conference, Education Commissioner Terry Holliday delivered some very unholiday-like tidings.

“There is a small shortfall in SEEK because the average daily attendance grew faster than the final budget projections used by the General Assembly,” Holliday said. “It’s somewhere between $12 million and $15 million.”

Holliday estimated that the mid-year reduction in SEEK to districts could range from $500 to $1,000 in a small district up to $200,000 for Jefferson County Public Schools, the state’s largest system.

“We’ve been to this rodeo before. This is the first time we’ve been a little bit short on the projection in about four years. The projections are a combination of efforts by the department, the General Assembly’s budget staff and the governor’s office,” the commissioner said in an eNews interview. “When you look at the big scope of things, $15 million out of almost $4 billion (the total SEEK budget) is a very small amount.”

A second factor is that state revenue growth also is coming up short of what was projected in the budget, which Holliday said carries more worrisome potential.

“The governor’s budget office has projected a state government shortfall of $135 million this year. The good news is that the (final) shortfall may not be as large as that, but the bad news is that it’s going to be something,” he said. “It will continue into FYI 2015-16 because that budget is built on achieving revenue growth so, among other things, districts can address the 2 percent teacher pay raises.

“I can’t see the General Assembly tackling this issue because (2015) isn’t a budget year,” Holliday said. “They’re going to punt the ball to the governor, who will make mid-year cuts to balance the budget.”

The commissioner said KDE will provide the revised SEEK projections to districts later this week, along with suggestions on areas districts may want to consider in revising their spending plans.