News Summary
The Fayette County school board has announced a pause on its proposed increase of the occupational license tax following public backlash and legal concerns. Amid a contentious prior vote to increase the tax from 0.5% to 0.75%, the board will form a new committee to review budget issues. Community members expressed dissatisfaction over transparency in the tax proposal process, which has led to a state auditor’s examination of the district’s finances. This pause marks an important step in addressing the district’s $16 million budget shortfall and ensuring public engagement in future budget discussions.
Lexington, Kentucky — The Fayette County school board has decided to pause its proposed increase of the occupational license tax in response to public outcry and legal concerns. Board chair Tyler Murphy announced that the board would cancel a public hearing and vote that was originally scheduled for June 23 regarding the tax hike.
A newly formed committee, consisting of diverse community members, will be tasked with reviewing budget issues before any further discussions on revenue streams take place. This decision follows the board’s contentious vote on May 27 to increase the occupational license tax from 0.5% to 0.75%. That vote, which passed with a narrow 3-2 margin, received significant backlash, including threats of a state audit and scrutiny from lawmakers.
Kentucky Attorney General Russell Coleman ruled the May 27 vote improper, asserting that the school board did not provide the necessary public notice required under state law prior to the tax increase decision. Coleman’s opinion highlighted legal flaws in the process, indicating that the board’s actions were not compliant with established regulations. However, tax attorney Tim Eifler disagreed with Coleman’s interpretation, stating that notice was not required since the fiscal court would be the body ultimately voting on the matter.
Despite the controversy surrounding the proposed tax increase, Sen. Amanda Mays Bledsoe described the board’s decision to pause the increase as a positive step, while cautioning that it should not be interpreted as a complete reversal or change of intent. Concurrently, voices from different sectors of the community—including both Republican and Democratic members—expressed dissatisfaction with the board’s lack of transparency regarding the tax proposal process. Community members noted that the voting notice was only distributed as an attachment to an online meeting agenda during the Memorial Day weekend, limiting public awareness and engagement.
The scrutiny has prompted State Auditor Allison Ball to announce a special examination of the Fayette County school district. This examination arises from public concern over the proposed tax hike, which is seen as a critical component in addressing an alarming $16 million budget shortfall that the district is currently facing.
Murphy has stated that the new committee will closely evaluate district operations, revenue sources, and spending patterns as they seek solutions to the budget crisis. The committee’s work is expected to include collaborating with district officials to make informed recommendations aimed at addressing future budgets, with a focus on meeting student needs.
In the backdrop of these developments, the school board had previously presented an $848 million tentative budget for the fiscal year 2026, which may be subject to amendments by the new committee. The current occupational tax revenue is projected to contribute around $57 million for the upcoming fiscal year, while the proposed tax increase could generate an additional $13 million to $16 million, a vital sum in light of the current budget shortfall.
At present, Fayette County workers are paying an average occupational license tax of $26 per month. Should the proposed increase be approved, that amount would rise to $39 per month, summing up to a total annual payment of $468.
The school board has recognized community concerns about transparency and has faced criticism for its communication practices prior to initiating the tax increase proposal. In light of the decision to pursue further community engagement, the KY United 120-AFT teachers’ union has indicated their support for the board’s move to seek more public input regarding the budget process.
Current plans to navigate the budget shortfall include not only exploring potential cost savings but also repurposing existing school facilities to meet the district’s needs.
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Additional Resources
- LEX18
- Wikipedia: Occupational Tax
- Kentucky.com
- Google Search: Fayette County School Board tax increase
- Kentucky.com Opinion
- Google Scholar: Fayette County School Board
- WKYT
- Encyclopedia Britannica: Public School Funding
- Fox56 News
- Google News: Fayette County schools
