Why Kentucky’s Final Budget Decisions Will Shape What Districts Can Deliver Next Year

Kentucky schools are making real progress, but proposed legislation could restrict local school board taxing authority at the worst possible time. Here’s why KASS says now is the time to protect local investment and strengthen the state-local funding partnership.

House Bill 500 is the most important education bill in Kentucky right now because it will shape SEEK funding, transportation support, and Tier I equalization for school districts statewide.

HB 1 is now law, but KASS says the most immediate issue for Kentucky public schools is the state education budget, including SEEK, transportation, and Tier I funding.

Dr. Brad Johnson recently posted a statistic that stopped me: one in three teachers say they're likely to leave the profession within the next two years. It lingered, not because it's shocking, but because it feels remarkably real. I've spent years sitting across from superintendents who started conversations trying to solve an instructional problem and ended them talking about the challenges of filling teaching positions and other vacancies, and how many teachers they may lose at the end of the year. I've heard veterans say, quietly, that they wouldn't choose this again. I've watched districts do everything right and still lose people, not to other professions, but to exhaustion. That's not anecdote. That's pattern. And in Kentucky, the data confirms what those conversations already told us. According to the Kentucky Department of Education's October 2025 Educator Shortage Report, 80% of Kentucky's public school districts began this school year with unfilled positions - a total of 2,421 vacancies statewide. That figure, while still striking, actually represents improvement: the previous year, only a single district in the entire Commonwealth started fully staffed. Progress is real. But 140 districts still began this school year short, three-quarters reported a decrease in qualified applicants over the past two years, and 401 emergency certificates have already been issued for this year alone. Meanwhile, Kentucky's reliance on alternative certification pathways has nearly tripled since 2016, rising from roughly 1,200 to more than 3,000 placements annually. Proficiency-based certifications, which didn't exist here eight years ago, now account for nearly 370 placements per year. These aren't signs of a system expanding its options. They're signs of a system under strain, reaching for whatever it can find. And the reach is costly. Superintendents across Kentucky describe a consistent pattern with alternative-certified placements: higher onboarding and training investments, greater likelihood of mid-year resignations that leave classrooms unstable, elevated absenteeism that drives up substitute costs, more frequent discipline challenges, and - most importantly - measurable learning consequences for students. This is not a reflection on the individuals stepping into these roles. Many are doing genuinely courageous work under difficult conditions, often entering classrooms mid-year, in the most challenging assignments, without the full preparation they deserved. The problem isn't their effort. It's the conditions the system has created, for them and for the students they're trying to serve. When a system chronically fills seats instead of building a profession, the costs don't disappear. They redistribute - onto students, onto colleagues, and onto district budgets already stretched thin. Johnson frames this partly as a generational shift - Boomers and Gen X conditioned to tolerate what never should have been normal, Millennials bridging, Gen Z refusing. There's truth in that. But I'd push further: this isn't fundamentally about generational toughness. It's about system design. For decades, we normalized what never should have been normal. We called overwork "dedication." We called silence "professionalism." We called exhaustion "the cost of caring." And many stayed anyway, because the kids mattered. They still do. But something has changed. Today's emerging educators are not less committed. If anything, they are more values-driven. They want impact. They want meaning. They want to serve. What they are unwilling to do is sacrifice their health, their financial stability, and their sense of professional dignity to systems that refuse to evolve. That's not fragility. It's clarity. Meanwhile, the job itself has intensified. Students arrive carrying more - academically, socially, emotionally. Communities navigate economic strain and social fragmentation. Public discourse has grown louder and sharper. And the distance between a classroom decision and a public reaction has compressed to almost nothing. Through all of this, compensation has not kept pace with inflation, support staffing has not scaled with student complexity, and expectations have expanded without parallel redesign. We have added weight without reinforcing the structure. But pipelines shrink when people look ahead and decide the destination isn't sustainable - when they calculate student debt against starting salaries and watch how educators are treated in a culture that criticizes the profession from every direction while asking more of it every year. At some point, the question stops being naive: Will this system care for me the way I'm asked to care for others? If we answer that question with nostalgia instead of reform, we will lose them. Not slowly. All at once. This is not simply a teacher issue. It is a workforce issue, an economic stability issue, a community resilience issue. Schools are the backbone of local workforce development — they prepare the talent pipeline for every other sector. But that backbone is under strain, and the numbers make that undeniable. Here is what makes this moment both urgent and clarifying: we know what stabilization requires, and we know what it costs. Kentucky school districts are operating with 26% less purchasing power than they had in 2008. That erosion isn't abstract - it shows up in salary schedules that can't compete with the private sector, transportation budgets that drain classroom dollars, and funding gaps that compound year after year regardless of how efficiently districts manage them. We aren't asking for expansion. We’re asking for restoration. That restoration has a name and a path. The KASS Big Three - a meaningful increase to the SEEK base funding formula, full funding of pupil transportation using accurate prior year data, and raising Tier I to 20% - represent the highest-impact recurring revenue investments available to Kentucky's policymakers. Together, they provide what no workforce strategy can succeed without: predictable, sustainable revenue aligned to real and rising costs. SEEK base increases are the primary vehicle for competitive educator compensation. Full transportation funding ends the forced diversion of classroom dollars to cover buses and fuel. And Tier I equity investments ensure that every district, regardless of local wealth, can compete for the talent their students deserve. And compensation is more than a salary line. For decades, competitive health insurance and retirement benefits anchored the education workforce's value proposition - offsetting salary gaps with the private sector and giving dedicated professionals a reason to stay. Proposals that erode those benefits don't just affect take-home pay. They eliminate the last competitive argument available to districts that can't win a salary bidding war. Beyond funding, stabilizing the workforce requires a modern accountability system that develops educators rather than simply measuring them, and a genuine investment in the pipeline itself through apprenticeship pathways, loan forgiveness, induction support, and a public narrative that treats education as the in-demand career sector it has been recognized to be. Passion cannot substitute for infrastructure. A career in education was never meant to require martyrdom to prove commitment. The next generation is telling us something important: they will serve, but not at any cost. The question before us isn't whether young educators care enough. It never was. The question is whether we are willing to invest in and redesign the system enough to deserve them. If we are, we won't just stabilize a profession. We'll strengthen communities for decades to come.

A provision in the House budget proposal would place a cap on the state’s contribution toward employee health insurance premiums. Based on projections shared by the Personnel Cabinet, that cap could shift substantial premium growth to employees over the next biennium. For Kentucky’s public schools, this is not simply a budget line item. It is a workforce strategy issue with long-term implications for staffing stability and student outcomes. The Foundation at Risk Public education has always competed for talent on total compensation — salary plus benefits. When salaries lagged behind the private sector, strong health insurance and retirement benefits sustained the education workforce for decades. Recent legislative investments began restoring salary competitiveness. That progress is measurable. More districts are fully staffed than in prior years, and momentum has been building. The proposed changes to the health insurance cap change that equation. If benefit costs rise significantly for employees, districts risk losing both the salary progress recently achieved and the long-standing benefits advantage that helped sustain the workforce during leaner years. The Personnel Impact According to projections referenced in statewide discussions: Premium increases could reach up to 78 percent. Teachers could see reductions in real take-home pay of approximately $5,832 per year. Bus drivers could lose roughly $6,420 annually. Additional impacts include higher deductibles and reduced coverage. When a teacher receives a raise but pays more in premiums, total compensation declines. From a workforce standpoint, that erases recent progress. Three Compounding Consequences This shift creates three compounding consequences for Kentucky’s public schools: 1. The Profession Loses Its Competitive Case For decades, education could tell prospective employees: salaries may lag, but benefits are strong and retirement is secure. Recent investments allowed districts to add that salary competitiveness was improving. If take-home pay declines, both arguments weaken at once. Recruitment becomes harder. Retention becomes less certain. 2. Classified Staff Lose a Primary Reason to Stay Bus drivers, food service workers, paraeducators, and custodians have historically accepted lower hourly wages in exchange for quality health coverage. Significant premium increases tip the balance. When classified roles go unfilled, districts face immediate operational challenges — transportation routes, meal service, and facility operations all depend on stable staffing. 3. Local Communities Bear Unequal Burden When total compensation declines, communities face pressure to respond locally. Property-wealthy districts may have some flexibility. Property-poor districts, many of which are already near practical tax limits, often do not. Workforce instability will not distribute evenly. It will disproportionately affect the communities least equipped to absorb it. T he Big Three Alignment Question The House budget proposal also includes continued investment in SEEK, transportation funding, and Tier I — the “Big Three” pillars designed to support competitive compensation and expand access to opportunity. Those investments reflect a commitment to strengthening Kentucky’s public education system. However, if benefit costs simultaneously reduce take-home pay, the workforce strategy those investments are intended to support becomes more difficult to sustain. You cannot recruit with one hand and create net financial loss with the other. Budget provisions must align. A Superintendent-Centered Perspective Superintendents understand fiscal responsibility. District leaders make difficult budget decisions every year, balancing sustainability with workforce investment. The question is not whether health care costs are rising. The question is how those costs are distributed and what consequences follow. Workforce stability is not peripheral to student success. It is foundational. Schools rise or fall on the quality and consistency of the adults serving students. Moving Forward As the budget process continues, clarity and alignment matter. Districts need: Accurate projections Clear implementation guidance Budget alignment that supports total compensation stability KASS will continue to provide superintendent-centered analysis focused on operational consequence and workforce sustainability. Kentucky’s public schools depend on talented educators and staff. Policy decisions affecting compensation structures should be evaluated not only in fiscal terms, but in terms of long-term workforce strength and student success.