$10,875 for each of the state’s 674,000 public school children
FRANKFORT, Ky. (June 4, 2014) — Kentucky’s public school children are getting more than a free education from the state: They’re getting a heavy debt load as well. Commonwealth public school districts hold more than $7.2 billion in bond debt and the interest owed on that debt.
That comes to roughly $10,875 for each of the state’s 674,000 public school children. The amount varies by school district: In small Robertson County, the per pupil debt is $127,000; the smallest per pupil debt was $2,178 in the Newport Independent School District.
If a district cannot make its payments, the Kentucky Department of Education covers the bill, backed by the state itself. Ultimately, bond repayment responsibility is borne by the taxpayers.
To get a glimpse of school debt, The Kentucky Gazette went through the audited annual financial reports, filed with the KDE, for 173 of Kentucky’s 174 public school districts for the school year 2012-2013, the most recent available. Webster County schools’ report was not available.
The $7.2 billion bonded debt, which must be and was approved by local voters, covers building construction and other big-ticket items such as buses, technology and the purchase of energy-saving equipment. It does not include long-term debt to cover employees’ accrued sick leave and required pension payments.
Bonds for the major purchases can be funded through regional Kentucky Interlocal School Transportation Association bonds that allow several school districts to issue one bond. For example, if several rural school districts need new buses, they can issue one KISTA bond to cover the purchase of all the buses – keeping fees lower and making the bonds more attractive.
Bond sales and maturity dates are staggered, so income and repayment are stretched out over a number of years. Most of the bonds currently on the books won’t mature until 2024 or later – some not until 2033.
All of Kentucky’s P-12 public school districts have bonded debt. In many cases, federal and other state and local money comes into play as a number of grants, subsidies and rebates are provided to districts. But taxpayers are on the hook for much more than the state and district shares.
— Laura Cullen Glasscock/The Kentucky Gazette
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