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Shelby schools could oppose state proposal

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State hopes to use district contingency funds to help with shortfall

By Scotty McDaniel

When the Shelby County School Board meets Thursday it will consider the approval of a Resolution of Opposition to a proposed plan that would allow the state to capture local school district contingency funds to help with its projected fiscal shortfall for the 2010-12 fiscal biennium.

Kentucky state law requires local school districts to maintain a contingency fund equal to at least 2 percent of their annual budgets.

“They were created to do things like build schools, or repair projects, or things like intelligent classrooms,” Shelby Schools Superintendent James Neihof said.

Shelby County has set aside more than the required 2 percent to help with the costs associated with opening Martha Layne Collins High next year, and to accommodate other factors such as country growth future school construction.

That funding is also helpful in emergency situations where other state funding is cut and a district needs to dip into its contingency fund to pay salaries.

But some members of the Kentucky General Assembly have shown support for the proposal that would require local school districts to use their contingency funds for their regular operating budgets, thereby saving the state some money.

The fund is fluid, so the effect of such a decision would depend on what date the change was linked to.

But since the proposal was brought to light a few months ago, school districts have signed resolutions opposing the idea, and Shelby could be the next to do so.

“That whole thinking is totally contrary to what we believe is right or appropriate,” Neihof said. “Districts haven’t worked hard to get those balances just to have their funding cut.”

Neihof will urge the board to approve the resolution stating “the Shelby County Board of Education strongly opposes the proposal to use local school districts' contingency funds to meet the projected state fiscal shortfall, and the Board urges the members of the Kentucky General Assembly to reject the proposal and the Board further urges other public officials and the public to speak out in opposition to the proposal.”

Neihof added, “Our best bet is to state this is our position. And I believe districts will stand unified in opposition of any legislation to capture contingency funds.”