Before the Kentucky School Board Insurance Trust (KSBIT) went belly up last month, it paid millions of dollars in royalties to the Kentucky School Boards Association, which administered the trust and used the profits to subsidize its own programs for decades. The subsidies helped the school boards group keep membership dues low and provide services for member districts, but that's not much consolation to school boards that were recently informed that they have to find as much as $60 million to pay off the insurance trust's deficit.
Crittenden County Board of Education is one of those, asked to pay in more than $100,000 to the program to help meet the shortfall.
At a work session last week, board members agreed more information is needed before the district pays into the KSBIT, which is asking participating school districts across the state to help close its fiscal gap.
Most of Kentucky’s school districts have paid into the low-cost insurance program, but the local district has not used KSBIT since 2004. Nevertheless, the district is being asked to pay for the years it did participate. The estimated total assessment is $103,722.
"...If a district has ever been with KSBIT for any insurance time period then that district may be assessed some amount," said Crittenden County Superintendent Dr. Rachel Yarbrough.
About 40 percent of the state’s 174 school districts participate in the insurance program, but all will share in paying past claims because all have been a part of the program at some point. The individual shares will likely range from less than $100,000 for some districts to more than $1 million for others. Fayette County, the state’s second largest district, is facing a bill that could be somewhere between $1 million and $2 million.
KSBIT officials said the estimate for the local school district is high and the final amount districts are charged may be lower. KSBIT is offering districts the option to pay the assessments outright or through bonding over a period of years.
Dr. Yarbrough said she and many other school superintendents across the state have concerns regarding the amount of money owed to KSBIT. She said many more questions need to be answered and facts gathered before school districts can properly address the issue.
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