LOUISVILLE, Ky. (WDRB) -- Jefferson County Public Schools Superintendent Brian Yearwood said the district is working to reduce its 2026-27 budget by $132 million, but staff and teacher salaries in schools won't be affected.

Yearwood said in a special news conference Tuesday that the district has relied on budget surpluses and federal COVID-19 relief money for years, allowing it to maintain services during a challenging period. JCPS CFO Eddie Muns said they also added certain things with that money "for a set period of time" but have since grown accustomed to them.

And now, that money is no longer available, Yearwood said.

"We are in the process of making very difficult decisions to rectify our unprecedented budget deficit," he said.

Some Jefferson County School Board members said they approved the spending because financial leaders told them it was sound. But during a meeting earlier this month, financial staff admitted they were told to remove certain organizational charts from financial presentations to the board.

"That was not viewed as pertinent and relevant and maybe data that would be useful for throwing out allegations about JCPS," Muns said Sept. 17.

Officials are now planning to cut $132 million from the next budget

On Tuesday, Muns wouldn't say who instructed him to remove the charts.

"It just doesn't make any sense for us to go back in time," he said. "That just does not make any sense."

JCPS is currently short $188 million, and district leaders said earlier this month the situation is so severe they may be forced to sell a portion of an $80 million investment portfolio assets just to make payroll. It'll help the short-term pitfall, but that safety net will no longer be there. 

"Next fall, we will be selling off assets in order to pay payroll, and the fall after that, we will not have enough assets to sell off anymore," Executive Administrator of Budget Thomas Aberli said previously. "And we will not reach that point, because at that stage, we will know if there will no longer be Jefferson County Public Schools."

Yearwood said the $132 million in cuts for the 2026-27 school year — a number he said is higher than what he was told when he was hired — will mostly come at the district's central office, calling these moves "a large share" of the total reductions. Muns said he isn't sure if the number of people in administrative roles or their salaries are comparable to similar-sized districts.

Yearwood said there will be no reduction in base daily pay of staff working directly in schools, and JCPS is committed to preserving what he called the "student experience" in schools.

"The quality of instruction and learning in our classroom will be safeguarded through this process," he said.

JCPS launched a Financial Stability page on its website in an effort Yearwood said will ensure transparency with Jefferson County taxpayers.

Yearwood said an independent auditor will be brought in, ensuring transparency and accountability. He said the district is actively negotiating that "forensic-type" audit process, an extra set of eyes he said is necessary to bring transparency and accountability to the public.

JCPS won't look at any additional tax increases until the books are balanced again, Yearwood said. Asked how he can regain the trust of taxpayers and parents who no longer believe in JCPS leadership, he said the steps announced Tuesday will be made with that goal in mind.

"We will build that faith back by having a balance budget (and) by having forums and answering questions," Yearwood said.

How we got here

Two weeks ago, the school board said it could run out of money in 2026. Board members said they only learned the district would have to sell off assets when asked to vote on this year's budget.

Board Chair Corrie Shull said the board was misled, and financial leaders admitted they'd cut information from briefings — including organizational charts — because they didn't see it as "relevant."

In 2019, the district's budget was $1.7 billion. Its current $2.3 billion budget is nearly double that of Louisville Metro Government.

"We are not going to be spending the same amount of money in the next budget year," board member James Craig said at a recent revenue meeting. "... but we also have to explore our revenues."

The district's CFO, Eddie Muns said JCPS's spending grew over the last eight years while COVID-19 relief funds allowed expenses to spiral.

Craig said the board was aware of the deficit but trusted the district's spending plan.

"We were told we have a plan. This is sustainable," he said.

When asked who told them the plan was sufficient, Craig said "financial leaders, superintendent, everybody else in the room."

Muns said the deficit ballooned from the original estimate due to costly repair projects and a sharp jump in insurance rates, some nearly double what the district paid in previous years. District leaders haven't said why the rates have increased so much. 

Craig said the district's leadership approach has shifted over the years and also defended district spending, noting there was no misuse of funds.

"This is not a situation where administrators were wasting money, per se, on lavish trips," he said. "We don't believe that there was misuse of funds anywhere in the spending over the last couple of years."

The Revenue Advisory Task Force is exploring ways to bring in more revenue. Between now and January, the district must find a solution for the $188 million deficit. That is when the draft 2026-27 budget is due and program cuts could be decided.

"We certainly believe in truth and transparency and that is always going to be the guiding standard for our presentation," Muns said.

Muns said the district is working with its internal audit team and the board audit committee, though a timeline for those audits has not been shared.

Last month, the board voted to approve a new property tax for next year. The district said the change in property tax will generate an additional $36.5 million compared to last year, bringing the district's total estimated tax revenue to nearly $799 million. About $58.5 million of that will be used for capital projects and paying off bond debt, while the remaining $740 million will go into the General Fund for school operations.

Kentucky State Rep. Jason Nemes, R-Louisville, said state Republicans will do everything in their power to stop JCPS from raising taxes, saying the budget shortfall highlights ongoing mismanagement.

"If they try to do that there will be an absolute war against them," Nemes said earlier this month. "This is a problem that has not a thing to do with money. ... It has to do with their incompetence." 

Related Stories:

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JCPS officials say financial crisis was not 'hidden from the board or the public'

JCPS board says it was kept in the dark about need to sell assets amid $188M shortfall

JCPS approves budget while facing financial crisis, could run out of money by 2026

JCPS creates new task force as district faces nearly $100 million budget deficit

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