KY Attorney General: Fayette County schools’ proposed tax increase is unlawful

The Fayette County Public School Board’s attempt to increase occupational taxes is unlawful, Kentucky Attorney General Russell Coleman announced Wednesday morning.

Fayette County Clerk Susan Lamb said about 1:30 p.m. Wednesday that the Fayette Fiscal Court would not vote on the tax increase Thursday as planned as a result of Coleman’s opinion.

But Lamb said the fiscal court would still meet because other, unrelated items are on the agenda.

Coleman’s opinion said the board failed to provide the legally required notice to the public before its May 27 meeting.

According to the attorney general’s opinion, the school board’s 3-2 vote to ask the Fayette Fiscal Court to increase school tax rates on residents and businesses’ net income from 0.5% to 0.75% was improper because, under state law, school boards must notify the public and hold a formal hearing before voting on new or increased taxes.

“Tax and spend government is a danger to Kentucky’s future, especially when officials who should be accountable to Fayette County voters try to ignore the rules to raise taxes,” Coleman said. “If the Fayette County School Board members believe they need more of Kentuckians’ hard-earned dollars, they should clearly and publicly make their case before their own constituents.”

Fayette school district officials have argued the vote was legal and the tax increase was needed to cover a $16 million budget shortfall.

“We respectfully but strongly disagree with the conclusions,” but will abide by the “spirit of the opinion,” and have added a period for public comment at the school board’s June 23 meeting, Fayette Superintendent Demetrus Liggins said Wednesday.

“We respectfully but strongly disagree with the conclusions drawn, particularly because the opinion does not reference the relevant statute that governs this matter. Our legal counsel maintains that the opinion raises more questions than it resolves, and we believe there are reasonable differences in interpretation,” Liggins said.

“That said, we remain committed to honoring the spirit of the opinion. We have documented the public comments received at the May 27 meeting and will offer an additional opportunity for public comment at our upcoming June 23 Board meeting.

“While others may be focused on political maneuvering, our focus remains squarely on student achievement and fulfilling our community’s expectation that we provide a world-class education to every child,” Liggins said. “We will continue working closely with the Fiscal Court and ensure that our efforts follow both the letter and spirit of the law, especially as we navigate this complex process that blends local and state policy.”

The current occupational license tax is expected to bring in $57 million to the district for the next fiscal year. Initially, the proposed increase in January 2026 would be $13 million to $16 million, with an estimated $27 million to $32 million annually when fully implemented, Fayette Deputy Superintendent Houston Barber said.

The average Fayette County worker is paying $26 per month under the current Occupational License Tax Rate for schools. Under the increase, the average worker would be paying $39 per month, or $13 more. On an annual basis, the average Fayette County worker is paying $312. Under the increase, they would be paying $468 per year.

Board chair Tyler Murphy did not comment on Coleman’s opinion. “I’ll refer you to the statement shared by the superintendent,” Murphy said.

At the May 27 meeting, Murphy, vice chair Amy Green and board member Penny Christian voted in favor of the tax increase. Board members Amanda Ferguson and Monica Mundy voted against it.

Fayette County Attorney Angela Evans said Wednesday she concurs with the Attorney General’s opinion and will advise the fiscal court to follow Coleman’s guidance that the fiscal court should not vote on the tax increase.

“Very recently, my office, as representative of the Fayette County Fiscal Court, had conversations with the Attorney General’s Office regarding this very important issue,” Evans said in a Wednesday statement. “I greatly appreciate the Attorney General providing the community with an opinion on this issue that is fundamental to our democracy. I am also pleased that our independent research and analysis of the law led us to the same legal conclusion. However, it was not my, or the Fayette County Fiscal Court’s, place to publicly opine on the legality of the Fayette County Public School Board’s actions.

“Although opinions of the Attorney General are not law, it is the expectation they be followed, and I will advise the Fayette County Fiscal Court to do so,” Evans said.

Sen. Amanda Mays Bledsoe, R-Lexington, first asked for an Attorney General’s opinion after hearing from her constituents, Coleman said.

“The FCPS board voted to increase the occupational tax without proper notification or advertisement that the school board was entertaining a discussion of a new levy, not to mention the time/date when it was going to be voted on by the board,” Bledsoe wrote in her request to the AG.

There was no time for the public to properly engage the topic, nor plan to attend the meeting, she said.

“The School Board’s failure to provide the statutorily-required notice makes the vote unlawful and void,” the opinion said.

“This validates what so many in our community, including myself, felt: Taxpayers were shut out of a huge decision about their own tax dollars,” Bledsoe said after Coleman’s announcement. “I’m calling on the Fiscal Court to take no action ... and for the school board to remedy this misuse of its authority. The board should table any further discussion of a tax increase until trust can be restored.”

Parent Matthew Vied had said he would lead an effort to recall the tax increase if it was approved by the fiscal court.

“Superintendent Liggins and the three board members who voted yes on the resolution have proven themselves unfit to lead. It was obvious from a plain reading of the relevant statutes that what they attempted was a violation of the law. It was also a violation of public trust,” Vied said Wednesday.

This breaking news story will be updated.

This story was originally published June 4, 2025 at 10:18 AM.