This is the second installment of the Daily News’ Educating Kentucky series examining five major issues Kentucky students and schools are facing. Some sources are unnamed to protect their anonymity when speaking about sometimes-contentious issues.

If it ain’t broke, don’t fix it.

That’s what about a dozen Kentucky school leaders told the Daily News about SEEK, Kentucky’s core education funding formula.

During the 2024 General Assembly, there was some momentum toward establishing a SEEK task force to reexamine the formula and whether it is working as intended.

While the work group didn’t come to fruition, education funding remains a hot topic in Frankfort after the legislature’s record SEEK investment in the biennial budget.

Why are we talking about SEEK?

The Support Education Excellence in Kentucky program was established in 1990, after the Kentucky Supreme Court ruled that education funding gaps between poor and wealthy districts were so large, they were unconstitutional.

Kentucky’s constitution requires the state to provide equal educational opportunity to all Kentucky students, and it had failed its job, the court ruled. SEEK was intended to be part of the solution to close those gaps.

The highly complex formula centers around base per-pupil funding set by the legislature, but not every district gets the same amount. The formula accounts for factors like local property assessments, student demographics and attendance when calculating each district’s total funding.

However, there are signs SEEK may not be operating as planned.

A 2023 KyPolicy report found that funding gaps had widened since 1990; then, the gap in per-pupil funding between poorer and wealthier districts was $3,489, and in 2022, it was $3,902.

While some turn to the nuts and bolts of the formula for answers, others turn toward the state’s overall public education funding – or lack thereof – as the problem.

As one central Kentucky superintendent put it: When it’s funded, it works.”

‘Record’ funding

While there is no doubt that nominally, legislators gave more toward SEEK than ever before in the 2024 budget session, some say “record” is not synonymous with “enough.”

SEEK base funding will increase by 3% for the 2024 fiscal year and by 6% the following year.

While SEEK base funding has increased every year since 2001, when the state’s contribution is adjusted for inflation, it tells a different story.

After the Great Recession in 2008 and 2009, inflation-adjusted SEEK base funding steadily declined. The 2024 budget begins to reverse that trend.

One central Kentucky superintendent said that a significant investment in the teacher’s retirement system makes funding seem more impactful than it is.

“They’re spending more on us, but we don’t have any more money,” he said. “ … They put more money in the pension, which is good, but that doesn’t put a penny into our district that can buy pencils, paper, books and computers or pay a teacher.”

Several school leaders echoed his sentiment, arguing that the historic pension investment was just correcting the mistakes of a previous administration that defunded the system, and not adding much additional value to day-to-day expenses.

Dr. John Garen, a retired economist who taught at the University of Kentucky, said looking at SEEK alone gives everyone the wrong idea about how well public schools are funded.

According to his research, when local and federal dollars, alongside state education money outside of the SEEK formula, is combined, overall public school funding has actually more than doubled since 1990, even when accounting for inflation.

Teacher raises

Teacher raises have been a sticking point for years. Democratic Gov. Andy Beshear has pushed the legislature to earmark funding specifically for that purpose, but Republican lawmakers have declined.

Instead, the legislature passed a budget with increased SEEK dollars and told districts they can divide it as they like.

Jim Waters, president of conservative think tank Bluegrass Institute for Public Policy, said he thinks that’s a better, more flexible solution than one that is “top down from Frankfort.”

On the other hand, several superintendents said even if they used the entire SEEK increase on raises, it wouldn’t be enough to provide salaries that keep up with inflation.

“The thing they have to realize is we’re still falling behind,” one southcentral Kentucky superintendent said. “A lot of districts have been able to give decent raises this year, but once again, a lot of that funding is coming from local taxpayers. It’s not coming from the funding that the state gave us through SEEK.”

After SEEK was established, the state contribution to public education used to be about 70%, while the local contribution was around 30%. Over time, that has nearly flipped, according to a 2023 KyPolicy analysis.

Why isn’t more money going toward SEEK?

Sen. Matthew Deneen, R-Elizabethtown, said K-12 public education makes up about 36-37% of each budget. Being fiscally responsible, he said, requires balancing the revenue coming in.

“We are in some cases considered a poverty state, a welfare state,” Deneen said. “So, we have to look at the percentage of people that are actually paying in through the tax system. So, there’s only a finite amount that we have to divide up to provide.”

Many Republicans argue that administrative bloat is to blame for some districts’ financial issues. Several superintendents agreed that administrative bloat could be an issue in a small number of larger districts, but for the most part, is exaggerated.

“You’re not solving this problem, this funding issue by reducing administrative staff,” one Eastern Kentucky superintendent said.

Daviess County Superintendent Matt Robbins thinks public schools have been “starved” for a reason. One, he thinks the supermajority Republican legislature is saving the money it could spend on public education for new school choice programs if Amendment 2 passes. Two, Robbins said they are “on a mission” to lower the state’s income tax as much as possible, which will give the state less revenue to spend.

So, what if we do change the SEEK formula?

Not everyone wants to keep the formula as is.

One Bluegrass region superintendent said a task force to revisit the formula is “necessary and probably overdue.” It’s a different state, economically and demographically, than when KERA passed in 1990, he said.

The superintendent would like a little more stability in SEEK, so districts can budget ahead of time.

“Anytime there’s a change for a district, whether it’s tax valuation, whether it’s enrollment, the burden seems to fall on the local taxpayer. And that’s the part that is a little frustrating for folks.”

Other superintendents called for increases in funding for English language learners and transportation, as well as addressing the impact of rising property assessments in growth districts that cancel out some of their SEEK base funding.

“In the end, it’s just a smaller pie,” one central Kentucky superintendent said. “It’s a pie that’s stayed about the same size while costs are exploding across the board.”