Could these budget solutions, including staff cuts, be coming to Fayette schools?

At Monday night’s Fayette school board meeting, district officials revealed potential cost-cutting measures to address the district budget shortfall and dwindling contingency fund.

Those included:

• Discontinue staff pay raises for the foreseeable future.
• Reduce staff position allocations to schools, which could be up to $32 million in reductions.
• Reduce staff through a reduction in force, including federally funded positions.
• Cut school-level budgets, dropping the amount given from about $116 per student to $100 per student.
• Raise property taxes in Fayette County.

No decisions on those potential future solutions or a business and community work group’s recommendations were made Monday. Board members said they would continue to talk about potential next steps.

District officials have largely blamed the district’s current financial problems on rising costs; inflationary conditions they say are plaguing school districts across the nation.

Last week, Liggins revealed the district’s contingency for emergencies and unexpected costs was likely significantly smaller than originally expected. It was estimated to be about $42 million, but may be as low as $15 million to $22 million.

Officials aren’t certain what the current fund balance is, they said Monday, but expect to know next week.

The district has a $16 million budget shortfall.

Given a Kentucky Attorney General’s opinion of an unlawful tax increase attempt and an upcoming state audit, school board members and community members at Monday’s marathon meeting criticized the district’s handling of the $848 million fiscal year 2026 budget.

At the meeting, Deputy Superintendent Houston Barber explained the difference between the budget’s planned contingency and the fund balance.

The planned contingency is a portion of the general fund set aside in the budget specifically for emergencies and unexpected costs.

Kentucky law requires at least 2% of the general fund budget be reserved. FCPS board policy is 6%.

The fund balance is the actual audited cash remaining in the general fund at the end of the fiscal year after all revenue and expenses are finalized. It is carried over into the next fiscal year.

The contingency is planned, while the fund balance is confirmed.

When the district built the budget for fiscal year 2025 that ended June 30, 2025, officials set aside $42 million as planned contingency in keeping with the policy of keeping 6% for emergencies.

At the end of the fiscal year in 2024, June 30, the audited fund balance was $42 million. That is the actual dollars carried forward after revenues and expenses were finalized. Usually the two amounts are different, but that year, by coincidence and not design, the amounts were the same, Barber said.

Board member Amanda Ferguson pointed out that at the 2024 September board planning meeting in the working budget for 2024-2025, the contingency was actually $43, 605,000. “Which I realize is only $1.65 million difference from the $42 (million) that you said was the fund balance but that was one of my several concerns with the budget at that time.”

Ferguson voted against the 2024-2025 budget because of those concerns.

The contingency was more than the fund balance last year at this time, she said.

“It’s concerning enough to me that you say the two numbers happen to be the same. That means that we’ve spent every penny that we had and we have nothing extra to carry forward. And now a year later we definitely don’t have anything extra to carry forward. In fact, we are in the hole,” said Ferguson.

Impact of budget work group recommendations

Barber discussed the potential impact of the recommendations of the Budget Solutions Work Group composed of business and community members that met over the summer:

• Initiate a sponsorship program for particular programs, sections of buildings and other public-private partnerships. Barber said it would allow local funds to be used in the classroom, but the sponsors could limit how the funds would be used. The next step for the district would be to identify opportunities and to ask the question, “Is such a program realistic for a re-K-12th grade district in terms of reliability and sustainability?”
• Make additional cuts of positions that aren’t at school campuses and don’t affect teachers or classrooms. The positions support instruction, mental health, student behavior and technology. That could save $1 million to $3 million. If approved by the school board, the district could next conduct a comprehensive review of district office positions, contracts and positions.
• Liquidate real estate and other assets, which could produce $8 million to $10 million. If approved, the next step would be to obtain appraisals and decide how the district would prioritize what to sell.
• Freeze any spending not contractually obligated at the district level. Savings of over $750,000 in travel and professional leave from the general fund will be realized in the budget year that began July 1, 2025, as a result of Liggins recent announcement of immediate cost cuts.
• Raise the school district occupational license tax and let the long-term budget solutions work group continue to work. This option would bring in $13.5 million to $16 million in the fiscal year that ends June 30, 2026 and $27 million to $32 million in the full 2027 fiscal year. Many people in the community, including work group members say they don’t want this option, but the school board on Monday set a Sept. 5 hearing that could legally allow a vote on the increase to occur. The cost difference to a taxpayer making $66,000 per year if the tax is raised from 0.5 % to 0.75 % would be $13. 75 per month.
• Reduce the district’s planned contingency fund from 6% to 4% of the total general fund budget or take the full $16 million budget shortfall from the planned contingency fund. Liggins has said that taking $16 million out probably won’t be possible because it will be lower than originally thought. The district has dipped into the contingency, officials said. The next steps, if approved, would be for the board to vote to reduce the planned contingency fund from 6% to 2% and initiate a long-term plan to rebuild the contingency fund.
• Reduce school maintenance costs by $1.7 million to $2 million or reduce maintenance cost and increase lunch prices. The next steps would be to prioritize projects and determine how to raise lunch prices without losing customers.

Recently announced actions

Recent actions taken by Liggins, effective immediately, include:

• Liggins said he would reassign the Financial, Accounting, Budget and Benefits Services department to report directly to him.
• Implement a mandatory hold on filling any district office vacancies
• Limit all out-of-state or overnight professional learning travel funded by the general fund to essential purposes only.
• Pause all maintenance projects unless they are directly related to health or safety needs.
• Hire retirees only for substitute teaching roles.
• Provide monthly public updates to keep the community informed.
• Launch an internal review of current and past financial procedures.

Past budget actions

In the 2025-26 school year, FCPS cut $8.9 million at the district-level budget, and made S1 million in reduction in director positions at the John D. Price Administration Building

There was a 20% to 30% reduction in all department budgets

Barber said the district made a 10% percent reduction in all district department budgets in the 2024-25 school year and eliminated non-essential overtime pay for employees.

This story was originally published August 21, 2025 at 7:56 AM.