Without loan, Fayette schools can’t make payroll. Tentative budget is $711.3 million

Fayette County Public Schools’ tentative budget for the next fiscal year is less than prior years, but the district will still need a loan to pay staff in July.

FCPS interim Chief Financial Officer Kyna Koch told the school board Monday that it’s not typical for Kentucky school districts to take a $110 million loan in anticipation of tax revenues in the fall, but the district has no choice.

Koch said if the district doesn’t get the loan, it will not be able to make payroll in July.

“We don’t need to. We have to. We cannot make payroll, the second payroll in July, without this,” Koch said.

Koch also said the beginning balance as of July 1, 2026, would be zero.

The proposed tentative budget for FCPS’ 2027 school year is $711.3 million, according to district documents shared at Monday’s school board meeting.

The proposed tentative general fund budget last year was $728 million.

The budget for the fiscal year that begins July 1, 2026, will have a contingency fund of $11.4 million, which meets the state requirement that it be 2% of the total budget.

The contingency fund for last year was a matter of contention for months, with community members questioning whether the number was correct and district officials revising it.

Discussion of the tentative budget comes as the district’s troubled financial situation unfolds. More than 115 district support positions have been terminated between the 2025-26 school year and the upcoming 2026-27 school year, FCPS has made a $110 million loan request, and the district has a 2 percent contingency fund balance, the bare minimum under state law.

The budget is structurally balanced, but only with an anticipated $3 million revenue from the sale of surplus property, district officials said. The district is considering selling its former central office on Main Street as well as two school campuses.

The total proposed tentative budget for fiscal year 2027 is $880 million. That number last year was $834.3 million. The general fund is about 81% of the total budget. The remaining funds include food service, building and other funds.

The proposed budget includes:

• $4.2 million for Chromebooks, this supports a four-year replacement cycle with the purchase of approximately 10,000 units per year.
• $1.8 million for security cameras in schools, supporting a 10-year replacement cycle.
• $3.1 million for school buses, supporting a goal of a 10-year replacement cycle.
• $400,000 to support the Dual Credit program, including funding from Title IV.
• $2.3 million from the General Fund to support preschool
• $4.1 million allocated for district-wide curriculum
• $150,000 to support the opening of the new Rise STEM Academy for Girls building.
• $455,000 to support the startup needs and the salaries for the principal and bookkeeper at the new Helen Caise Wade Elementary school.

Salary reductions:

• Between the 2025-26 school year and the upcoming 2026-27 school year, more than 115 district support positions have been reduced.
• The reduction in work calendar days for the 2026-27 school year will result in an estimated $1.9 million in savings.
• There is no change to the work calendars for classroom teachers or paraeducators.

The proposed budget also includes an estimated decrease of $6.9 million in operational costs.

District officials said in documents Monday they will continue conservative spending practices at the district level while prioritizing the preservation of classrooms and teachers, continue recruiting and retaining highly skilled and experienced teachers and staff, begin the recovery efforts to restore the General Fund contingency to 6%, and recommend adoption of a 4% tax rate this fall.

Superintendent Demetrus Liggins and Interim Chief Financial Officer Kyna Koch revealed last month that the district’s finances had been misstated since at least 2008.

The school board is expected to vote on the tentative budget at its May 21 monthly meeting. State law requires that the Board of Education adopt a tentative budget for 2026-2027 by May 30, 2026.

“We still have a lot of moving pieces,” Koch said.

This story was originally published May 11, 2026 at 6:41 PM.