FCPS: Hard Choices Loom for Fayette Schools Without New Funding

Financial Challenges Facing Fayette County Public Schools

Fayette County Public Schools (FCPS) is facing a significant financial challenge that could lead to major changes in the district's operations if new revenue sources are not identified. A top official, Deputy Superintendent Houston Barber, recently addressed a work group of community leaders, outlining the potential consequences of an $16 million deficit projected for fiscal year 2026, which began on July 1.

The district operates with an $848 million budget, but rising costs and flat revenues have created a growing gap. Without additional funding, FCPS may be forced to implement painful measures, including staff cuts, reduced student services, and other operational reductions. These actions could impact key personnel such as teachers, administrators, counselors, social workers, and paraeducators.

Potential Impacts on Students and Services

Barber warned that without new revenue, the district might face larger class sizes, fewer support services, and the elimination of intervention programs for struggling readers, English language learners, and students with disabilities. There could also be cuts to career and technical education, arts, and elective courses, along with risks to some enrichment programs. Additionally, mental health support for students may decline, and the district may rely more on long-term substitute teachers.

Transportation cuts, deferred building maintenance, and technology rollbacks are also possible outcomes. High-poverty schools and students with disabilities may be particularly affected, leading to lower academic achievement, higher dropout rates, and a weaker local workforce.

The Need for New Revenue

Barber emphasized that the district cannot sustain competitive salaries, absorb inflation, or deliver the education students deserve without new revenue. He explained that the shortfall is due to rising costs outpacing revenue, not because of increased spending on new initiatives. Instead, the district is dealing with inflation, ongoing investments in teacher and staff salaries, and the expiration of federal pandemic relief funds.

Superintendent Demetrus Liggins reiterated that the $16 million shortfall is a projection for the 2026 budget, not the current year. He noted that the FY2025 budget is balanced and that the district remains financially stable. However, he acknowledged that the challenges faced by FCPS are not unique to the county, as school districts nationwide are grappling with similar structural issues.

Proposed Solutions and Community Reaction

The district’s budget solutions work group has recommended 10 potential moves to address the deficit. These include taking $16 million from the contingency fund, freezing non-contractual spending, and exploring public-private partnerships. Other options involve reducing school maintenance costs, liquidating real estate, and increasing lunch prices.

One of the most controversial proposals was raising the occupational license tax rate from 0.5% to 0.75%. This measure was put on hold after concerns were raised about insufficient community discussion and lack of proper notice. According to Kentucky Attorney General Russell Coleman, the school board did not provide adequate public notice or hold a hearing before requesting the increase.

Barber clarified that the occupational license tax is a local payroll and business tax paid by individuals who live and work in Fayette County. It applies to net profits of businesses operating in the county and is withheld from paychecks or filed by self-employed individuals. All of the revenue from this tax supports FCPS.

Under the proposed rate increase, someone earning $66,000 annually would pay $495 per year instead of $330, or an additional $6.35 per paycheck. However, individuals who only live or only work in the county are exempt from the tax.

Next Steps

The budget solutions work group’s recommendations will be sent to the school board in August. Board members are expected to review them during their upcoming meetings. The final decision on how to address the deficit will depend on the board’s evaluation of these proposals and ongoing community engagement.