Olympia School District families face another round of staffing and program reductions next school year.

The board votes June 25, on a 2026-27 budget that cuts approximately $3.5 million from current spending levels, potentially losing nearly 10 certificated teaching positions, dropping from 622.9 full-time equivalents to 613.3. Administrative staff shrinks from 41.3 FTE to 39.7.

A public hearing runs from 5:30 p.m. to 6:30 p.m. at Knox Administration Center, 111 Bethel St. NE, before the board takes its final vote. Residents can also watch via Zoom. The sign-up deadline for public comment passed June 24.

About 70 percent of OSD's $196.4 million general fund comes from state funding tied directly to enrollment. Superintendent Patrick Murphy told the board at its June 18 first reading that enrollment is the district's greatest revenue generator: "When students walk through our doors, they generate an allocation that comes from the state."

Enrollment stood at 9,555 students in 2024-25, down from 9,713 in 2015-16, and a Berk Consulting forecast presented in October 2025 projects a further decline of roughly 1,000 students over the next 10 years.

Executive Director of Business and Finance Kate Davis told the board June 18 that the structural problem won't end with this budget cycle. "There's just a structural problem in the way that the district is funded," she said. "Declining enrollment contributes to it."

The district's budget document confirms more reductions ahead: $3.4 million in additional cuts planned for 2027-28 and $895,000 more in 2028-29.

The proposed budget projects $196.4 million in revenue against $195.7 million in expenditures, leaving an ending fund balance of $8.4 million, or 4.4 percent of spending. The district's goal is to reach 6 percent within two years.

OSD's fiscal health score from the state Office of Superintendent of Public Instruction ranks it 272nd out of 295 Washington districts, at 2.15 on OSPI's scale. A score below 1.75 triggers mandatory state oversight.

Special education costs are projected to exceed state funding by $8.2 million in 2026-27, and the district's compensation costs outpace state inflation funding by more than $1 million.

Three adjustments were made after the board approved a Reduced Education Plan in April 2026: one technology support position was eliminated, saving $95,000; a family engagement coordinator was added at $88,000; and a half-time elementary art support position was added at $70,000. The district also shifted its state-funded Early Childhood Education and Assistance Program (ECEAP) preschool to a local nonprofit.

If the board adopts the budget Thursday night, the district must file it with OSPI by Monday, August 31. The full budget document is available on the district's BoardDocs page.