Budget Makes Education Goals Harder to Achieve with Cuts to Per-Student Funding

Kentucky has set high goals and taken great strides in improving educational achievement and degree attainment rates. However, the 2013-2014 state budget will make progress difficult over the next two years given its cuts in per-student funding for both P-12 and higher education.

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April 19, 2012

Budget Makes Education Goals Harder to Achieve with Cuts to Per-Student Funding

Kentucky has set high goals and taken great strides in improving educational achievement and degree attainment rates. However, the 2013-2014 state budget will make progress difficult over the next two years given its cuts in per-student funding for both P-12 and higher education.

Kentucky’s considerable challenges—and also gains—in education are well-documented. And the state has set very high goals for improvement: significantly increasing the percentage of high school students who are college and/or career ready by 2015 and raising college degree attainment rates to at least the national average by 2020.[1]

Adequate funding is needed in order to realize these goals, but the allocations for education in the 2013-2014 budget translate into additional cuts—particularly when enrollment growth is taken into account.

P-12

Inflation-adjusted per student state funding for P-12 education has declined seven percent from its level before the recession began (see Figure 1).

Figure 1[2]

Sources: KCEP calculation using data from Office of the State Budget Director and Kentucky Department of Education.

The funding levels contained in the 2013-2014 budget combined with official attendance projections mean per-student funding will decrease further—to an estimated $6,371 in 2013 and $6,363 in 2014—before even taking inflation into account.[3] State funding was slightly lower than those levels in 2010 and 2011, but the state had over $500 million in federal recovery act monies for education to spend during each of those years that are not available in 2013-2014.

The budget includes:

• No additional investment in early childhood education, which would be an important step toward reaching the state’s long-term educational goals.[4]
• Reduced per student funding for SEEK, the main funding program for local schools. SEEK funding is flat-lined from 2012, but per-student SEEK funding will decline because the state is expecting over 3,000 new students a year over the next two years.[5]
• Additional cuts in 2013-2014 to Operations and Supports Services, which covers the technology needs of school districts (among other functions).
• New 4.5 percent cuts to the smaller Learning and Results Services programs—such as Professional Development and Dropout Prevention—and flat-lined funding for most of the larger programs (Family Resource and Youth Service Centers, Gifted and Talented, Extended School Services, and Community Education).[6]

Higher Education

Inflation-adjusted per student funding for higher education has declined 23 percent from its level before the start of the recession (see Figure 2).

Figure 2[7]

KCEP calculation using data from Office of the State Budget Director and Kentucky Council on Postsecondary Education

And if enrollment in higher education continues to grow at the same rate it did over the past year, per student funding for higher education will decrease to an estimated $4,940 in 2013 and $4,909 in 2014, without adjusting for inflation.[8] That would mean per student 2014 funding levels are at least 27 percent below their 2008 levels.

These cuts mean:

• Tuition is expected to increase at Kentucky’s universities and community colleges. Funding for these institutions was cut an additional 6.4% in the 2013-2014 budget. New tuition increases will be on top of increases of 130 to 200 percent (depending on the institution) over the past decade.[9] The University of Louisville’s president has already announced that the university expects to raise tuition six percent for the 2012-2013 school year, and Eastern Kentucky University administrators reportedly plan to increase tuition five percent for in-state students.
• Financial aid options continue to be limited for students facing increased tuition costs. Funding for state financial aid programs is basically frozen in the 2013-2014 state budget. This means that the merit-based Kentucky Educational Excellence Scholarship (KEES) program is still fully funded (although the size of the scholarship has not grown), while the need-based College Access Program (CAP) continues to be substantially underfunded. In 2011, only one-third of students who qualified for CAP actually received assistance because of limited dollars.[10]
• General Fund appropriations for adult education in the new budget are 11.2 percent lower than 2012 levels.[11] Kentucky’s adult education programs and services target adults who lack a high school credential or GED (many of whom will later transition to college). The Council on Postsecondary Education reported that the cuts will result in around 3,000 fewer adults in need of the programs and services being served.[12]

Investing in education is critical to Kentucky’s future, and the state has high expectations for making gains in educational achievement and degree attainment. However, the 2013-2014 budget cuts for per student spending in both P-12 and higher education are not a sound strategy for meeting the state’s goals.

The Kentucky Center for Economic Policy is a non-profit, non-partisan initiative that conducts research, analysis and education on important policy issues facing the Commonwealth. Launched in 2011, the Center is a project of the Mountain Association for Community Economic Development (MACED). For more information, please visit KCEP’s website at www.kypolicy.org.