Kentucky’s school finance system was ruled unconstitutional in 1989. In response, the state implemented a new funding formula—Support Education Excellence Kentucky, or SEEK—to provide more state aid to property-poor districts. The SEEK program has three tiers. To receive state aid, districts must levy a local property tax of 30 cents per $100 of assessed property value. In the first tier of the formula, the state guarantees each district $3,222 per pupil in fiscal 2005, adjusted by the number of special education students and the number approved for free lunches. The second tier allows districts to generate additional revenue that is supplemented by the state to ensure equality across districts. The third tier allows districts to raise even more revenue, but that portion is not supplemented by the state. Kentucky targets a portion of state aid through 27 categorical programs, which pay for specific needs, including transportation, reading initiatives, professional development, gifted-and-talented education, early-childhood education, technology, school construction, and teacher benefits. Kentucky has no state revenue sources earmarked for education. Kentucky now faces a new court challenge, Young v. Williams, filed in January 2003.
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