Central KY school district might eventually need to get a loan to make payroll

Woodford County Schools officials might eventually have to get a loan to make payroll before receiving property tax revenue in November, District Chief Operations and Chief Financial Officer Shane Smith said at a July 28 school board meeting.

“We could potentially get to a point where we don’t have enough cash in the bank to cover the payroll outflow,” Smith said. “I don’t think we’re there yet. But we’ve got to get some things adjusted.”

“That might be a potential conversation that we may have ... to do some kind of loan. It’s not uncommon. That might be something we have to address at some point.”

Some Kentucky school districts have received loans from the Kentucky Department of Education. The department’s Office of Finance and Operations has not been contacted by Woodford County for assistance, spokesperson Jennifer Ginn said.

Smith said that the deficit for fiscal year 2025 that ended June 30 was $2 million. The budget in fiscal year 2025 was $68.4 million.

At the school board meeting, board Vice Chair Ambrose Wilson IV said the deficit was “unsustainable.”

Payroll per month in the district is about $2 million, Smith said at the meeting. In 2034-2024, the district had 3, 889 students and 248 teachers, according to the Kentucky School Report Card.

At this time, we do not have the need for any loan to make payroll,” new Woodford superintendent Lori Jones told the Herald-Leader Friday.

“We are committed to transparency with the community. Our priority is to ensure the long-term financial health of our district, and we will continue to explore every possible solution to manage our cash flow effectively until the new tax payments are received.”

Jones added on Monday, “As a new superintendent, I bring a fresh perspective and a plan to bring our stakeholders together to co-construct our vision for the 10 years through HIVE (Harnessing Innovation, Vision & Excellence) groups. These groups will also be key in establishing transparent, two-way communication in our district. Working together, we will be able to identify ways to innovate and eliminate unnecessary spending.”

How did Woodford County get the deficit? The funding mechanism that Kentucky uses to fund local school districts, SEEK (Support Educational Excellence in Kentucky) is directly correlated to local property assessments in each county. As property assessments increase, SEEK is reduced by 30 cents per $100 of assessed property valuation, Smith told the Herald-Leader Monday. Woodford County has experienced tremendous property valuation growth over the past four to five years, Smith said.

“This has resulted in significant losses in SEEK funding during that period. SEEK losses will exceed $3.1 million from 2022-2026 school years. Local tax rates have barely kept up with these losses during that period. Coupled with inflationary impacts everyone has witnessed during the same time period, these offsets have created a deficit for the district,” Smith said.

One school board member has a different thought about the deficit.

“I think Mr. Smith has done everything that he has been told to do. I think that the reason that we find ourself in this situation is on, in no way, Mr. Smith’s fault,” school board member Sarah McCoun said at the meeting. “ I think we had a previous administration that thought we had a blank checkbook and that it was full of money and could spend, spend, spend. That’s why we find ourselves in this situation.”

How much will the school board receive in November in property tax revenue? It depends on the tax rate that will be set. In FY25, Woodford County received approximately $18.5 million in November for property taxes.

This story was originally published August 4, 2025 at 4:55 PM.