Reports: Kentucky education funding leaves annual shortfall of $1.3 billion for students

Valarie Honeycutt Spears, Lexington Herald-Leader on Jun 24, 2025

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LEXINGTON, Ky. — School funding in Kentucky has not kept pace with inflation in recent years, resulting in an annual statewide shortfall of $1.3 billion, according to new reports from a group of superintendents who lobby for public school funding.

The Council for Better Education, comprising superintendents from across Kentucky, released reports Monday to every public school district in the state.

The reports’ key finding: Since 2008, funding shortfalls have affected core aspects of education in Kentucky, including staffing, class sizes, student services and transportation, leaving local districts struggling to fill the gap despite increases in local tax contributions.

The reports come after a group of Kentucky students, including the Kentucky Student Voice Team, sued the state in January, claiming Kentucky has failed to fulfill its constitutional obligation to provide all students with an adequate and equitable public education.

The lawsuit, filed in Franklin Circuit Court, draws from a 1989 court decision that led to the Kentucky Education Reform Act, a landmark initiative that propelled the state’s schools from the bottom of national rankings to models of success.

To address funding inequities, the state adopted a formula-driven allocation model known as Support Education Excellence in Kentucky.

But advocates say the state’s funding of SEEK has failed to keep up with inflation for nearly two decades.

For example, if the state funded SEEK at 2008 levels adjusted for inflation, Fayette County Public Schools would have received an additional $76.3 million in state funding last school year, Tom Shelton, executive secretary for Council for Better Education, told the Herald-Leader on Monday.

According to the council, Kentucky’s SEEK base guarantee of $4,326 per student would need to exceed $5,743 to match the purchasing power it held in 2008.

School transportation is also underfunded, with the state covering just 74% of calculated costs in recent years, the council said.

The SEEK formula is working as designed to fairly distribute state money, council officials said in the release. The problem, they say, is that the total amount that’s allocated is too small.

“It fairly distributes the funding that is provided. However, the issue is not the formula itself; it is the lack of adequate state funding being placed into the formula.”

Leaders of the Kentucky House and Senate did not immediately comment Monday.

“This hurts our most vulnerable students most of all,” Shelton said. “Local school districts have continually tried to make up the shortfall by raising local property taxes to a level that local residents are currently funding the majority of public school expenditures rather than the state, as is required by our Constitution.”

The Council for Better Education, formed in 1984, was started by a group of 28 superintendents from property-poor districts and other education advocates who were frustrated by the legislature’s failure to fund the state’s schools, its website says.

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