JCPS will not need more budget cuts to reduce deficit, CFO says
JCPS will not need more budget cuts to reduce deficit, CFO says
Kathryn Muchnick, Louisville Courier JournalWed, May 6, 2026 at 10:45 PM UTC
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JCPS will not need more budget cuts to reduce deficit, CFO says
Additional cuts to reduce Jefferson County Public Schools' deficit will not be needed after the next budget is approved, district financial leaders said as they unveiled the next step in the 2026-27 budget process.
The district's tentative budget, which builds on a draft budget released in January but will not be finalized until September, shows JCPS will still carry a deficit of $40 million in the coming fiscal year. But as revenues are projected to increase, interim Chief Financial Officer Tom Aberli said more cuts will not be needed to continue paying that down.
"It wasn't a matter of just pulling the rug out from everybody knowing that we'd then be able to add back immediately as we have new revenues. It was recognizing this is how much we have to pull back to get us stable," Aberli told reporters after a May 6 meeting of the Audit and Risk Management Advisory Committee.
In total, JCPS made $115 million in cuts — to central office positions and operations, districtwide costs and flexible funds provided to schools, the tentative budget revealed. That's lower than the original figure of $132 million that Superintendent Brian Yearwood said was needed to balance the books after details of the district's dire financial situation came to light.
The difference is because part of the $132 million reduction was intended to go toward deferred costs, like facilities maintenance or Chromebook repairs, Aberli said. Now, less money will go toward deferred costs, but $80 million will still go toward paying down the deficit.
Here's everything you about where JCPS' finances stand.
How much will JCPS' deficit decrease in the 2026-27 budget?
JCPS will decrease its deficit by $80 million in the 2026-27 budget. With the reductions made this year, financial leaders expect that deficit to continue to shrink.
There will still be a gap between recurring revenues and recurring expenses — how much cash the district brings in and how much it spends — to the tune of $40.1 million. That figure is roughly $1 million higher than what was projected in the draft budget.
In September, when the working budget is finalized, that deficit number will be higher to account for two pots of money: carry over funds, which are unused dollars in schools' flexible accounts that are returned back to them next year, and carry forward funds, which are payments that are accounted for but not paid at the start of the next fiscal year. Those numbers could still change before September.
That means the total deficit is forecasted to be between $88 million and $100 million in September, Aberli said.
By comparison, that number was $188 million last September. The year before that, it was $295 million.
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Where are JCPS' budget cuts coming from?
The tentative budget lays out where JCPS found $115 million in savings this year:
$27.8 million comes from central office positions
$12.7 million comes from operational costs in central office
$6 million comes from central office contracts
$44.2 million comes from districtwide costs, a category which includes long-term substitute teacher pay and employee stipends
$25 million comes from school-based flexible accounts
Most of those savings will go toward reducing the deficit. Additional money will be reserved for facility improvements, bus replacements and other deferred costs.
That pot of money reserved for facility improvements is lower than what was forecasted in the draft budget. But JCPS also made fewer cuts than were originally proposed, such as saving mental health practitioner and elementary bookkeeper positions.
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"Every time we're adding stuff back in, something's going to have to come back down, otherwise we're affecting our deficit," Aberli said.
Will JCPS' budget be balanced?
No. Expenses still outpace revenues.
But there's a difference between a balanced budget and a responsible one, Aberli said. Defining exactly what a balanced budget looks like for JCPS is up to board policies, especially when accounting for vacant positions in the district that are budgeted for but not filled.
Will JCPS have to keep making cuts?
No. "There's no discussion about that. There's no anticipation that anything relating to a reduction in staff would have anything to do with deficit reduction," Aberli said.
Is JCPS taking out a line of credit to cover payroll costs?
Yes, sort of. JCPS is working with financial advisors to prepare what's known as a tax anticipation note, which is a short-term debt security used by public entities to bridge gaps in cash flow. While it addresses the same need as a traditional line of credit — allowing JCPS to cover payroll while waiting for income — it functions slightly differently. Though the tax anticipation note is being prepared now, JCPS only has to pay interest if the district uses it.
Whether or not JCPS ends up drawing on that tax anticipation note depends on several factors. Aberli said the district is more likely to draw on it to cover payroll costs in the fall of 2027 than 2026. But JCPS is preparing for low cash flows in October and may need money to cover one or two payrolls.
That's because the largest portion of JCPS' income is from local property taxes, which are paid in November. In the months leading up to that infusion of money, cash gets tight, especially as JCPS is separately working to pay down its deficit. While JCPS has not used a line of credit to cover payroll for this purpose before, the dip in cash before November happens every year.
The interest rate for the line of credit is yet to be negotiated, but Aberli estimated it could hover around 4%, in addition to a fee for setting up the arrangement.
Chip Sutherland, who works at Baird and is one of the district's fiscal partners, said it's a normal tool used by public entities.
"This is a tool that allows you at a low cost to have the flexibility and insurance you need if something doesn't pan out like you hope, but you're not holding the taxpayer's money," Sutherland said.
Jefferson County Board of Education member Taylor Everett, who sits on the audit committee, said he felt better about the use of a line of credit after the meeting.
"They did a really, really good job explaining what it is, why the risk is not high, why other districts of our size use this, and honestly why it's a better mechanism than looking at other ways to bring in more revenue, which nobody wants right now," he told reporters after the meeting.
What else is in the tentative budget?
The document lays out how much is spent at each instructional level in JCPS. Find the full report here.
The board is scheduled to vote on the working budget May 12.
Reporter Kathryn Muchnick covers children and education. Reach her at kmuchnick@usatodayco.com.
This article originally appeared on Louisville Courier Journal: Will JCPS take out a line of credit to cover payroll? What we know
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