School Choice: State-directed Programs: The Kentucky Experience

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This is the "State-directed Programs: The Kentucky Experience" segment from Fears versus facts about school choice: An overview of issues surrounding the effects of competition on public education

By John Garen, Ph.D.

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State-directed programs: the Kentucky experience


KERA effects on funding, performance

Ongoing dissatisfaction with public schools led many state governments to pass legislation and institute plans to address their poorly performing education systems. Kentucky is no exception. The 1990 KERA represents the main piece of legislation from which Kentucky’s reform efforts flowed.

In broad terms, KERA required tax and funding changes to equalize spending throughout all schools districts by providing state-level resource guarantees to districts. It also raised the overall level of spending. Additionally, it increased state involvement in local taxation, funding and school operations. State-level testing started along with rewards to schools based on test scores.[1]

KERA achieved its intended effects with regard to spending. Between the final pre-KERA 1989-90 school year and the 1995-96 school year, per-pupil spending in Kentucky grew 30-percent, the largest increase in the nation.

Additionally, school districts with the lowest pre-KERA funding tended to have greater expenditure growth. This increased funding showed up in a variety of ways. For example, during this same time frame:

  • The student-teacher ratio in Kentucky schools fell by 4.5 percent.
  • Teacher payrolls rose by 3.86 percent.
  • The share of teacher salaries in the budget actually fell from 46 percent to 41 percent, indicating that budget items other than teacher salaries grew faster.

Though KERA intended to improve student outcomes, the rapidly rising educational expenditures in the early- to mid-1990s had little to show regarding the effects on test scores during this time period. For example, fourth-grade NAEP math test scores for Kentucky showed a slightly lower increase than for the U.S. as a whole over this time period. The eighth-grade NAEP math test scores showed a slightly higher increase than for the U.S. Scores for Kentucky students taking the American College Test (ACT) had somewhat smaller increases than the U.S. average. In short, the increased spending and other initiatives of KERA did not institute any notable change in Kentucky student outcomes as measured by these test scores.

Still today, Kentucky students do not fare well. The 2007 NAEP reports show low proficiency rates in reading and math for Kentucky’s fourth- and eighth-graders, Kentucky students taking the ACT continue to score below those for the U.S. and the Kentucky Council on Postsecondary Education continues to report high levels of remedial course requirements for incoming freshmen who recently graduated from Kentucky high schools.[2]

In summary, KERA’s sharply increased spending and other initiatives did not bring about notable change in student outcomes as measured by these test scores. While there has been an attempt on the part of Kentucky education establishment to portray performance since KERA’s enactment as laudable, the small improvement actually achieved to date and the recent poor performance in reading and writing proficiency show these claims of great progress do not mesh with the facts.


Like many other states, KERA required mandatory, statewide testing, presumably to track the progress of the public-school system and reward good schools and school districts for doing well. However, since its inception, the state’s testing program has been problematic.

The initial test, Kentucky Instructional Results Information Systems, known by the acronym KIRIS, was deemed inadequate and replaced in 1998 by the Commonwealth Accountability Testing System, called CATS. Of course, dispensing with an inappropriate test is a good thing, but changing the test makes it impossible to make comparisons over time to assess whether improvement occurs.

Even after the introduction of CATS, the validity of the test and comparisons over time has been called into question. For example, the percent of Kentucky students deemed “proficient” according to the CATS testing system is consistently higher than that for the federally sponsored NAEP test. Thus, Kentucky’s testing system overrates performance of its schools. Furthermore, the extent of the overrating has worsened over time so that Kentucky’s proficient rating has come to more closely resemble NAEP’s next-lowest rating of “basic.”[3]

Additionally, an audit of the grading on the writing portfolios revealed that auditors disagreed with 41 percent of the scores. This was not just random error, but 94 percent of the scores in the highest, “distinguished” category were deemed too high, as were 61 percent of the scores in the next-highest category: “proficient.”[4] In other words, the audit indicates a strong upward bias in scoring.

It comes as no surprise that schools and school districts want to show strong test results. After all, financial rewards and avoiding the label of being a “failing school” come with better test scores.

The ‘intangibles’

Another issue with rewards tied to test results involves focusing the incentives of schools too narrowly on training students to answer multiple-choice questions and formulaic open-response questions in selected topic areas. While topics covered in these tests remain important, time, energy and effort is diverted away from other worthwhile aspects of education including fostering creativity, experiencing cultural activities such as art and music and nurturing intangible, noncognitive traits.

The latter include characteristics like perseverance, attention, motivation, self-confidence and tenacity. Standardized tests do not measure these directly. Yet they are important life skills-traits and presumably are valued by parents. Some scientific evidence (and much anecdotal evidence) suggests that these traits feed into success, including lifetime earnings. [5]

How should states reward schools and teachers who successfully nurture students? The present system of testing and rewards simply does not do so. Instead, an assessment by parents is needed regarding how well schools perform and giving families options through school choice.

More state directives

Despite the problems Kentucky has experienced with its state-orchestrated overhaul of public schools, state government continues to issue directives regarding how schools operate and programs they must offer. A sampling of the bills introduced during the 2008 session of the Kentucky General Assembly illustrates this:

  • House Bill 34: Called for adding a physical activity requirement to the school day.
  • Senate Bill 32: Called for spending on career guidance and technical education.
  • House Bill 294: Called for the creation of dropout-prevention grants for certain schools.
  • House Bill 461: Called for establishing family resource and youth centers at certain schools.
  • House Bill 460: Called for a requirement that high schools teach 12th-graders how to vote.
  • Senate Bill 207: Called for increasing the school year by two days.
  • Senate Bill 129: Called for allowing school systems to give away old equipment.
  • House Bill 587: Called for allowing schools to move graduation ceremonies to dates before instruction ended.

While none of these bills represent bad things, they indicate a high degree of micro management by state government that experience shows is an unsuccessful approach.15 Good reasons exist for this. Schools throughout the commonwealth are quite heterogeneous. A valuable program for one school might hold little value for another. Therefore, the resources used to implement a program throughout the state may fail to achieve the desired effect and end up being wasted. This simply adds to the “more spending, no results” paradox.

Much of the information and knowledge about what works at specific schools comes from parents, teachers and students at the school. Thus, rather than mandating programs from afar in Frankfort, it would make much more sense for schools to design programs specific to the school.

In addition to allowing schools discretion, it is also important that they have incentives to use their discretion appropriately. School choice provides this incentive.

More from Fears Versus Facts About School Choice

You can read more from Fears versus facts about school choice: An overview of issues surrounding the effects of competition on public education in the pages below.


  1. Hoyt, William, “An Evaluation of the Kentucky Education Reform Act,” Kentucky Annual Economic Report, Center for Business and Economic Research, University of Kentucky, 1999.
  2. “Confusing editorial belies clear facts,” Innes, Richard, Bluegrass Institute Perspective No.2008-13, Sept. 2008.
  3. “CATS in Decline: Federal Yardstick Reveals Kentucky’s Testing Program Continues to Deteriorate,” Innes, Richard, Bluegrass Institute for Public Policy Solutions, 2007
  4. This was widely reported in the Kentucky media WHAS 11 News, “Audit: CATS Test Writing Scores Inflated, Critics Want Test Dumped or Altered,” March 19, 2008
  5. Heckman, J., Stixrud, J., and Uzrua, S., “The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior,” Journal of Labor Economics, July 2006.