Embattled insurance fund estimates it will hit up school districts for between $611 and $2.8 mil.
02/07/2013 06:53 PM
The Kentucky School Boards Insurance Trust estimates that it would have to hit school districts — and the University of Louisville — a total of $60 million worth of assessments as it tries to erase a deficit before it closes down this summer.
The shares for each of the districts that used the trust to cover its workers compensation and/or liability insurance over the last 30 years will range from $661 for Maysville Independent School District to a high of nearly $2.8 million for the Fayette County School District.
The University of Louisville, which used the trust at one time for liability insurance, would owe $768,078, according to the preliminary estimates.
Just three of Kentucky’s 174 school districts owe nothing. Click here to download the full table of estimates: school_district_assessments.pdf
The assessments will be based on how long the districts have been using the insurance, their size and their claim history. And the assessments must be approved by the trustees of the Kentucky School Board Insurance Trust as well as state insurance regulators.
“KSBIT and the Kentucky School Boards Association (KSBA) continue to work with reinsurers, regulators and state officials to find ways to decrease the assessment amount. These numbers are an estimate only,” said a letter dated Thursday to districts from the trustees.
Districts have been bracing for the assessments since the trust issued a letter last month announcing its deficit and plans to shut down by the end of June, as Pure Politics was first to report.
The Kentucky League of Cities took over control of the trust from the Kentucky School Boards Association in 2010. Since then, KLC has cut the insurance trust’s operating budget. But an independent review of claims to the fund showed that the pool had been bringing in less money than it had paid out in claims since 1990, Jonathan Steiner, executive director of the KLC told Pure Politics in January.
School districts could choose to pay their assessments at once or sell bonds to spread out the cost over 20 years — but with interest.
Fayette County School Superintendent Tom Shelton told Pure Politics last month that he was bracing for an assessment of more than $2 million. He said his district has the money in its rainy day fund, and he would prefer to tap that rather than take on debt.
This comes at a difficult time, though, for many school districts. Stagnant state funding in recent years coupled with increases in enrollment in many districts have effectively amounted to cuts.
Gov. Steve Beshear lamented the rollback of education dollars in Wednesday night’s State of the Commonwealth Address.
“Our schools aren’t treading water,” he said. “They are slowly sinking.”
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