The passage of the Kentucky Educational Reform Act (KERA) in 1990 had a dramatic impact on the funding of primary and secondary education in the state. The amount of money spent on education increased signiﬁcantly with the passage of KERA with districts in rural areas of the state experiencing the largest growth in spending (Hoyt, 1999). This has led to a decline in the disparity between rural and urban districts in education spending. However, despite the increase in educational spending, Kentucky still lags behind the typical state in the U.S. in spending per student (Troske, 2008).
Although several studies examine the impact that KERA had on the level of spending, very little work has been done on the impact of KERA and on how the increase in education money is being spent. What evidence there is suggests that KERA may have impacted the allocation of education dollars in Kentucky. In 1996 Kentucky had the lowest ratio of teachers relative to total public school staff of any state in the country, so Kentucky appears to be spending a much larger share of its educational budget on administrative staff compared to other states (Hoyt, 1999). In addition, the share of money spent on teachers appears to have increased after KERA, particularly in rural areas which tend to receive a larger portion of their funding from the state (Hoyt, 1999). In Kentucky state dollars make up a much larger share of a district’s educational budget than in other states, and this lack of control over funding could lead to less efﬁcient uses of resources.