FCPS no longer considering OLT increase ahead of final budget meetings

On Thursday, August 28th, the Fayette County Public Schools (FCPS) Board of Education held a special meeting to discuss the Fiscal Year 2026 (FY26) Budget.

Superintendent Liggins shared new information about the budget to clear up recent uncertainty regarding how much the District's starting fund balance and Contingency Fund hold.

• The FY26 starting fund balance is roughly $26.3 million.
  • The starting fund balance is typically made up of money that is carried over from the previous Fiscal Year. This is also true of LFUCG's Budget.
  • The District had initially anticipated a $42 million starting fund balance.
• The Contingency Fund is also sitting at roughly $23.6 million.
  • The District had initially planned for a $42.9 million Contingency Fund.

Liggins told the Herald-Leader and the Board of Education a few weeks ago that money had already been spent from the Contingency Fund. He did not have any answers for what exactly the Contingency Fund had been spent on, but told Board members that an internal investigation was being done to find out exactly how much of the Fund had been used, and what it has been used for. He recommended moving the entirety of the starting fund balance to the Contingency Fund.

Liggins also told Board members that he was no longer interested in pursuing an increase of the Occupational License Tax (OLT). The OLT increase was projected to raise around $13.5-16 million for FY26 – enough to fully fill the District's $16 million projected deficit for the FY26 budget.

Given the ongoing controversy around the OLT, Liggins instead presented several strategies to the Board that would cut costs for the District. Some of those strategies do not require Board approval, including:

• Freezing hiring for all FCPS positions, excluding classroom positions and bus drivers;
• Restricting District-wide events, such as staff appreciation dinners;
• Laying off Superintendent Liggins's personal executive coach;
• Moving staff positions from schools with excess staff to schools that are understaffed, which would save money by cutting substitute costs at the understaffed schools;
• Discontinuing Non-traditional Instruction (NTI) Days.

These strategies are estimated to save $6 million combined.

Liggins recommended other strategies to address the FY26's projected deficit that would require Board approval. Those are:

• Selling the Southside Technical Center property;
• Assigning more work to FCPS internal legal staff rather than hiring outside attorneys.

The Southside Technical Center, which once hosted technical and vocational classrooms and programs, is no longer in use due to the opening of the newly-constructed HILL campus in downtown Lexington. Board Member Amy Green alluded to future plans for the building to host maintenance services that are currently housed at Lafayette High School's campus. Liggins said information around previously discussed plans for the building would be presented to the Board to bring everyone up to speed and to inform whether selling the property would be the best decision.

Liggins also discussed raising school lunch prices, but the Board was not interested in that option. Liggins wrote in an email to FCPS parents on Friday that he would not ask the Board to increase lunch prices for FY26, but would instead look to community members and businesses to potentially sponsor and donate to school lunches. The District's school lunch fund operates at a $1 million deficit annually, which they fill using money from the General Fund.

The School Board did not make any decisions on these recommendations.

In September 8th's School Board Meeting, the Superintendent's Office will present another draft of the FY26 Budget for the Board to consider. The Board will have a final vote to adopt the Budget on September 22nd.

• The School Board is required to submit an initial draft budget to the Kentucky Department of Education by May 30th. A final version of the budget must be submitted by September 30th.

The School Board had scheduled a public hearing for Friday, September 5th for residents to give public comment on a potential increase in the OLT. Now that the District is no longer considering that option, the public hearing will be an opportunity for residents to share their thoughts on Liggins's recommendations and strategies to cut costs, as well as share any other ideas or thoughts they have on the FY26 budget.

The School Board meeting did not address recent allegations reported by the Herald-Leader that FCPS Budget Director Ann Sampson-Graves was placed on administrative leave due to her raising concerns about the District's financial troubles as early as February 2024. Sampson-Graves has not filed a lawsuit against the District, but her attorney sent a letter to FCPS outlining instances since February 2024 where she warned District leaders that budget cuts were necessary and was allegedly ignored or told not to discuss her concerns publicly. She was placed on administrative leave on August 15th.