Report shows rising funding gaps between school districts

Published 4:33 pm Monday, August 28, 2023


A new report released Wednesday says inequities between Kentucky public school districts are worse now than they were more than 30 years ago.

The Kentucky Center for Economic Policy said the gap between the most and least affluent districts was more than $3,900 per student in 2022.

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In 1990, the think tank said that margin – in 2022 dollars – was nearly $3,500.

That was the same year the General Assembly passed the Kentucky Education Reform Act. The law came about because the state Supreme Court ruled in 1989 that all students must receive the same opportunity for a sufficient education.

KERA raised taxes, including the sales tax from 5% to 6% and the top corporate rate to 8.25%. It also removed state income tax deductions, such as allowing deductions for federal taxes paid from state tax liability.

“But since that time, the General Assembly has chipped away at General Fund resources by increasing tax breaks for businesses and reducing the individual and corporate income tax rates, among other reductions and exemptions,” the report says.

When KERA began, the state’s share of educational funding was about three times more than the local share. The center said that 30 years later, the local contribution overtook the state’s portion.

With the state share of education funding dwindling, the center says local districts have looked to raise revenue on their own. That, though, has exacerbated the gap.

To make that point, the report showed what some similarly sized school districts would receive if they increased their property tax rate by a penny for every $100. Bardstown Independent Schools would receive nearly three times as much.

The Republican-led General Assembly has put more emphasis on school choice initiatives since it gained control of both chambers in 2016. Some of those efforts have been derailed in the state court system, and as a result, there will be a push for a constitutional amendment to be placed on the November 2024 ballot on the topic.

That’s a concern to the Kentucky Center.

“Efforts to reduce or even eliminate the individual income tax and open the door to private school funding further jeopardize public school resources,” it said in the report.