Data Center Money a Windfall for Fayette Schools—Now, What to Do with $40 Million this Year?

Fayette County School Superintendent, Dr Patterson, recently announced the new QTS data centers are expected to contribute approximately $40 Million dollars to Fayette County Schools over the next fiscal year and expected to recur in later years. He shared that the most recent tax digest reflects that the data centers have added approximately two billion dollars to the Fayette County tax digest.

During the presentation, Post 4 School Board Member, Dr. Regina Daigre asked if any of the money had been budgeted or otherwise appropriated. Dr Patterson stated that none of the money has been programmed so far.

The recently adopted Fiscal Year 2027 Fayette County School System general fund budget is approximately $347 million with $156 million expected from local property taxes. This $40 million addition was not budgeted and reflects more that 10% addition to the budget and more than 25% increase in local property tax collections. CompleteBookmarkedFY2027BudgetBook.pdf

The question facing the Fayette Board of Education as well as other communities that have added or will add some form of data centers, how should the additional taxes affect the expenditures of that entity.

In the below chart, you will see that the student population of Fayette County Schools has been essentially flat, either growing or shrinking by a few hundred. However, costs have grown at a higher percentage, driven mainly by increased employee health plan costs.

For years, I have written that the local tax structure of mainly residential houses, with a significant population of seniors who hold a senior homestead exemption has challenged Fayette’s schools to maintain their excellent services while facing increased costs and a property tax millage cap of 20 mills.

The administration has been forced to give up certain proven assets of the “Fayette Advantage” such as smaller class sizes and additional parapro support in the early grades as costs rose and legacy revenue remained stagnant.

Now, with this data center windfall, the question is how the funds should be applied to benefit Fayette County schools and the taxpayers who support them. Some will argue for tax relief, others will argue for restoration of Fayette’s proven strategies of prior years, others will suggest new programs or assets, and there will be a sentiment to put at least part in the bank as an even larger rainy day fund reserve.

Some will argue that Fayette County cannot spend enough on education, others will argue that property taxes are another factor that makes housing costs more unaffordable. I have argued for the “Fayette Advantage” on these pages in the past and for meaningful tax relief more recently. I believe the solution is a combination of both.

Hopefully these conversations will happen in open meetings that provide the entire community with an opportunity to provide feedback and input. You can find the schedule of FCBOE meetings here.