Kentucky budgets more than a third of state funds for K-12 education, with both state government and local school districts – including all public school districts in Northern Kentucky – helping to fund public schools.
How much each pays is tied to something called SEEK.
SEEK, for Support Education Excellence in Kentucky, has been Kentucky’s main source of public school funding for over 30 years. Some call it a funding formula, others call it a distribution model. It works by guaranteeing enough money to pay a minimum, or base, amount to educate every public school student in the state, based on average daily student attendance, with more on the side.
Kentucky increased the guaranteed base per pupil amount in 2022 after no base increase for four budget years. It will increase the guaranteed base again in July, from a current amount of $4,200 per student to $4,326 per student, in fiscal year 2025, and again, to $4,586, in fiscal year 2026. On top of the guaranteed amount are the “add-ons” – extra state and some federal funds for specific student needs (at-risk students, students with disabilities, transportation, etc.).
Kenton County Schools Superintendent Henry Webb told LINK nky that the state education budget passed by the Kentucky General Assembly this year is the best he’s seen in his 17 years as superintendent.
That doesn’t mean he thinks public schools in Kentucky are necessarily well funded, though.
Instead of keeping pace with the increasing cost of education, SEEK has actually fallen behind.
“It works as long as the state funding from state legislators is high enough to make that distribution model work. Unfortunately that’s not been the case over time,” Webb told LINK. “The reason I say that is in 2008 our district was about 52% state funded. Last year we were 38% state funded.
“So, yes, we’re getting more SEEK dollars, but the majority of that’s coming locally. And that is easily readily observed in all of Northern Kentucky,” Webb told LINK.
NKY’s SEEK picture
Some school districts in NKY, and across the commonwealth, get less state SEEK funding while others get more. What the state doesn’t pay toward the base amount, the local tax base does.
Districts with a larger tax base – a county district with a lot of taxable property versus a small independent district with less, for example – typically pay a larger share of per pupil base SEEK while districts with a smaller tax base get a larger share from the state. To illustrate, here’s a look at local and state portions of base SEEK per pupil funding for Boone, Kenton and Campbell counties versus three river cities districts for the 2023-24 school year:
For several years, however, the state guaranteed base has not been keeping pace with inflation, according to a 2023 report from the Kentucky Center for Economic Policy. As of 2023, the state share of the SEEK base adjusted for inflation was 27% below what it was in 2008 per the center’s report. That lag in the state base SEEK limits how much revenue public schools in NKY and statewide generate over time, according to the center.
“When the state underfunds its portion of the formula, the burden shifts to local districts and, because of their varying ability to generate revenues, this increases the inequities among districts,” the center said in an earlier report from 2021.
Neither is the state providing enough support for SEEK above the baseline to equalize funding between wealthy and poorer districts. Districts with less taxable property, like river cities districts, typically have to set higher school tax rates in an effort to close what KCEP said in the report is a widening funding gap.
Ludlow Independent retiring Superintendent Mike Borchers told LINK that, while the tax rate may be higher than the counties, his community in particular seems to understand the need. “They understand they are going to pay a little higher tax to get some of the things that go with an independent district, like small class sizes, community identity. It’s that community school a lot of us were used to growing up.”
Borchers also told LINK there are challenges for the district.
“We have to adjust yearly with the funding we do have. You have to adapt staffing to your population and your needs. We’ve done a really good job of that,” he said. Grant funding, federal or otherwise, helps to fill in the gaps and fund wraparound, or individualized, services that students need, said Borchers.
County districts on the other hand often struggle to pay costs unique to their including student transportation, historically underfunded by state lawmakers. That appears to be changing, at least in the state budget that takes effect July 1. The new budget will fund pupil transportation at 90% next year with 100% funding in fiscal year 2026 – the first time in nearly 20 years that lawmakers have fully funded those costs as required by law.
Not all NKY districts have the same reliance on transportation funding, but they all need state funding to educate their students. So, what is the state’s share and what is the local share of basic SEEK?
How does basic SEEK work?
All public school districts in Kentucky are required under SEEK to contribute what is called “30 cent local effort” to the guaranteed base. That requires districts to contribute 30 cents per $100 of taxable property of the base through local taxes. Districts can raise that money – or local base – by taxing real property, motor vehicles or through so-called “permissive taxes” like utility or occupational tax.
What the local taxes don’t cover toward the guaranteed base, the state does.
The base – as the word implies – is just a minimum. So it really isn’t enough to pay for all the services districts must provide. So there are “add-ons” – additional nonlocal funds to serve specific student populations including at-risk, free and reduced-cost lunch students, students with disabilities and limited English speaking students – that bump up the SEEK amount. (Add-ons are mentioned in the district SEEK table in this story.)
After the add-ons, districts can raise revenue up to 15% more than the total of its SEEK base plus the add-ons with something called Tier 1 SEEK. State funds partially match those funds.
If more funding is required, districts can raise revenue (called Tier 2) up to 30% more than the total of their SEEK base, add-ons and Tier 1 revenue with voter approval. But there’s no state match for that extra tier of funding.
At the same time, every public school district in the state – including every district in NKY – has had to raise taxes above the Tier 1 maximum at least once in recent years to make up for what the state hasn’t provided. In 2021 for example, all 171 school districts statewide raised local-only funds in Tier 2 territory, according to the Prichard Committee, a Kentucky education advocacy organization. That move generated an average of $805 in local funds per pupil for districts overall but helped poorer districts the least.
“In Tier 2, districts with lower wealth bring in less revenue to use in serving their students, even when they set tax rates just like those in districts with more taxable property,” according to the Prichard Committee.
Ironically, SEEK was designed by state lawmakers to equalize funding – or close funding gaps – between wealthier and poorer districts after the Kentucky Supreme Court in 1989 declared the state’s education system unconstitutional. So it’s notable that, in 2023, KCEP reported that the per-pupil funding gap between the state’s wealthiest and poorest districts is larger than it was in 1990.
Webb noted the extra effort from poorer districts in his interview with LINK.
“Poorer districts get more state funding. But even in the poorest districts, that level of local effort has increased,” he said. “If you go back to 2008 and you look at the money the state was putting into SEEK, at that time, districts in Kentucky were funded. I’m going to say about 50% local and 50% state. I’m going to tell you that today, even with the [2024 state budget] increase, it’s going to be more local than state.
“So that happens when property assessments go up and the distribution model has not increased to keep pace,” Webb told LINK.
Where does SEEK funding go?
Funding for teachers and other personnel is at the top of the list for SEEK spending in NKY. Kenton County Schools spends about 83% of its district budget on salaries and other personnel costs, Webb told LINK. Other districts in the region are on par with that percentage.
After state lawmakers approved a bump in the SEEK base this year, NKY school districts began approving pay raises for teachers and other staff. The Kenton County Board of Education approved a 5% pay raise, as reported by LINK in May. In April, Covington Independent’s board of education approved a 4% salary raise for full-time personnel.
Other NKY public school districts have already, or are expected to, approve pay raises for staff this year.
Staying competitive with other districts in the region is one reason why.
Right now the median pay for a public school teacher across the river in Cincinnati is around $87,000 while the median pay for districts in Kenton County is approximately $60,000, LINK reported in April. To support and retain teachers, Webb said that NKY districts have to pay well.
Pay raises approved by the Kenton County school board will move starting teacher salaries closer to $50,000 “which, I can tell you, is first or second in Kentucky,” Webb told LINK. For comparison, the starting salary for first-year teachers in Cincinnati Public Schools was $50,277 for the 2023-24 school year according to CPS.
“So our new teachers coming in will be paid well,” said Webb.
“All the services for kids and families are delivered by people, so that’s where our expenses are. About 83% of our budget is people, and we try to pay our people well because of where we live, the competitiveness. A challenge is being able to have a budget that’s strong enough in our competitive environment for personnel, both certified and classified, to pay them what they need to be paid to be valued. That will remain a challenge in our profession for many years to come.”
Ludlow – also trying to stay competitive – spends 80%-85% of its district budget on salaries and personnel, Borchers said. The increase in base state SEEK in the next budget should make a difference there, he told LINK in May.
“It’s been a big help,” he said. “Northern Kentucky is always going to have the challenge of competing with Ohio. It’s just a higher start for their teachers,” said Borchers. “So we really work hard on the culture, on trying to keep red tape to a minimum, and allow them to teach and work with our kids.”
Does SEEK need to be changed?
Concerns about equity in SEEK have some stakeholders talking about whether the formula needs to be changed.
During the 2024 legislative session in Frankfort, a group of Kentucky House lawmakers including Rep. Kim Banta (R-Ft. Mitchell) proposed a task force to discuss whether changes to the SEEK guaranteed base, tiers or add-ons are needed “to maintain the original goal of SEEK,” according to the proposal. The proposal passed the House Education committee but stalled late in the session.
That doesn’t mean the discussion is over. For Webb, the answer is more state support. Any kind of SEEK reform, he told LINK, is going to be “really complicated.”
“The problem you have with changing SEEK, and I’ve talked to legislators about this – no matter what you do, there are going to be winners and losers. Let’s say for example they change that 30 cent deduct [local effort] to 20 cent deduct. That would help our district and region immensely, but it would hurt the poorer districts. If you raise that to 40 cents, it would have a profound impact on our region and help the (poverty) districts,” he told LINK. “So what they did last session, they put more money in and they also raised Tier 1, which kind of helped everybody but really helped poorer districts.”
“It’s my belief that the answer will always be more money has to be put into education,” said Webb. “Because it doesn’t matter what you do with that formula. It’s going to take more state funding.”