Olympia superintendent says $3.8M cuts won’t ‘right the ship.’ Here’s the plan
Olympia School District Superintendent Patrick Murphy says proposed cuts of about $3.8 million and more than 30 full-time equivalent positions are not enough to “right the ship” and resolve the district’s budget issues.
Murphy said during a board work session on April 2 that the board submitted about 30 questions regarding the reduction in force plan.
.jpg "Knox Bldg_OSD (1).jpg")
The Olympian previously reported that the district was overspending this school year by $1.9 million. In order to fill that gap and increase the district’s ending fund balance to 4.7%, the 2026-2027 school year budget needs to be cut by $4.1 million. That means 4.7% ($8,936,000) of the general fund would be available at the end of the 2026-27 year as reserve funds.
Murphy presented a budget reduction plan to the school board on March 26 that included cutting more than 30 full-time equivalent positions, freezing pay and increasing class sizes to support his goal of ending the school year with a higher fund balance.
He told the board on April 2 that those reductions alone don’t fully resolve OSD’s long-term financial outlook.
“We continue to face problems within the structure of our district,” he told the board. “We have a structural deficit, meaning that our ongoing costs are increasing faster than our ongoing revenues.”
Murphy said this is driven by several factors, including the state public education funding structure and rising inflation not keeping up with actual district salary costs. He said the cost of benefits, substitute teachers, operations and some positions are on the rise or far exceeding their funding source.
He said examples are behavior techs, family liaisons and chemical dependency specialists.
Murphy said the OSD serves students across several smaller schools, and that structure comes with costs that aren’t fully recognized by the state’s funding and staffing allocation models. He said with enrollment being on a downward trend since the pandemic, staff members are fractionalized, with some working in more than one building.
He said when state funding doesn’t adequately cover basic costs for education, districts like Olympia face “increasing financial pressure, and there’s more difficult decisions about how to sustain services over time.”
Murphy said Olympia’s small schools have historically been funded by local levy funds. He said that model works when the majority of schools fit the prototypical model. But OSD is “at the flip side of that now,” he said.
He said the district needs more local levy access to fund its small schools. He said currently, there isn’t one elementary school in the district that meets the prototypical model.
Murphy said it takes more than 450 students to pay for one principal, which is the prototypical model. He said OSD doesn’t have one elementary school now, nor will it next year, that meets that threshold.
Murphy said the district is currently using about 69% of its existing classroom space for classrooms. He said the industry standard is to be between 80% and 95% utilization.
He said some buildings are being used well, while others are not. Lincoln Elementary and Olympia High School are at the industry standard, but then there are some that are below 50% utilization, he said, and many that hover around 50%.
Murphy said in periods of enrollment growth, the cost pressures a district faces can be partially offset by additional revenue. But in periods of flat or declining enrollment, which is where OSD has been for some time, the gap becomes more difficult to manage.
Murphy said part of the plan to address the district’s utilization problem is to take some unused square footage in elementary schools offline by not heating those spaces and not cleaning them to save money on custodians and utilities.
Murphy told the board that reductions are focused on the elementary level because about 91% of the enrollment decline in the OSD since 2020 has been in elementary schools.
Murphy said an additional 82,115 square feet were added in the 2018 to 2019 school year through portable buildings, mostly at elementary schools. He said since then, custodial staffing has been reduced, but the extra square footage is still there.
His proposal is to begin reducing the elementary schools’ overall square footage by 41,400 square feet out of a total district-wide amount of 681,000 square feet. This would save about $150,000. Portable buildings would be the priority, and then unused space in the main building would be taken “offline” as necessary.
Murphy said he will have another update on the proposed budget cuts for the board to review at its April 23 meeting. Until then, two listening sessions are scheduled for the public to attend and learn more about the proposal and voice their concerns. The first is from 6 p.m. to 7 p.m., Tuesday, April 14, at the Washington Middle School cafeteria. The second is from 6 p.m. to 7 p.m. Thursday, April 16, at the Jefferson Middle School cafeteria.
Murphy and a spokesperson for the district have not responded to The Olympian’s questions about what specific schools would be affected, and whether closing elementary schools could be on the table, again. According to previous reporting from The Olympian, Murphy and the school board considered closing Madison and McKenny elementary schools in 2024 due to a $3.5 million budget deficit, but didn’t go through with it.
Several parents took legal action against the district, according to previous reporting, saying the decision to close schools did not involve enough community input. Courts ordered the district to restart the school closure process, and Madison and McKenny remained open. The district opted for central office and in-school reductions to address budget issues, instead.
Murphy revived the idea of closing schools to save money at a board meeting in June 2025. He said closing and consolidating schools can save money and boost staffing efficiency. With help from an outside consulting agency, the district narrowed down seven schools for potential closure, in order from most plausible, including: McKenny, Reeves, Madison, Pioneer, Boston Harbor, L.P. Brown, and Jefferson, according to previous reporting.
.jpg)