JCPS plans line of credit to pay staff amid $188 million budget shortfall

LOUISVILLE, Ky. (WDRB) — Jefferson County Public Schools, a roughly $2 billion school district, is preparing to take out a line of credit to help pay teachers as it navigates a $188 million budget deficit.

The borrowing would address potential cash shortfalls expected in the coming years, particularly during October and November. That is when school districts typically see lower cash flow before receiving the next round of property tax revenue.

JCPS interim Chief Financial Officer Tom Aberli said much of the district’s revenue comes in during a short window.

"Over half of our revenues come in just two months, and then all the other 10 months, we just stay dry," Aberli said.

Despite the district’s past financial challenges, using credit to cover payroll is new for JCPS.

"Borrowing from a line of credit is not something we, from JCPS, have done over the last 20-plus years," Aberli said.

When asked about the concern that the line of credit could create additional debt through interest payments, JCPS board member Taylor Everett said he doesn't see it being a problem.

"The reason I don't is because we plan to pay it back so fast that interest is not going to have enough time to accrue to create a new issue that we’re going to have to deal with," Everett said.

The proposal is expected to be discussed at a meeting Wednesday of the district's Audit and Risk Management Advisory Committee, where JCPS finance officials and staff with RSA Advisors will present more details.

RSA Advisors is a financial consulting firm that works with agencies, like school districts, on borrowing strategies and financial planning.