Douglas County schools face $22 million budget deficit as enrollment falls

Douglas County schools are heading into the 2026-27 budget season with a $22 million deficit that could force tougher choices in classrooms, staffing and student programs if enrollment keeps sliding.

The Douglas County School District’s proposed budget is about $901 million, a gain of less than 1% from the current year, but district leaders said more than $15 million of that spending is slated for salary and benefit increases as they try to recruit and retain employees. To cover part of the shortfall, officials plan a one-time drawdown of the district’s general fund, a move they said would keep reserves near pre-COVID levels. The district’s Fiscal Oversight Committee said that would bring the fund balance close to a target range of 4% to 5% of expenditures, but it warned that further cuts could weaken long-term financial stability.

The problem is not a one-year blip. District officials project a loss of 467 neighborhood-school students, about a 1% drop, and said enrollment has fallen for seven straight years. Fewer students mean less money under Colorado’s school finance system, while Douglas County also faces rising transportation, facilities and employee benefit costs. For families, that combination can translate into larger classes, pressure on staffing levels, fewer electives and more strain on support services if the district cannot close the gap with recurring revenue.

Board member Brad Geiger said the district’s budget problems could worsen without a structural change to state school funding, underscoring how different this year’s budget season looks from prior years. In April, Superintendent Erin Kane pressed the case for a possible mill levy override, pointing to the district’s local property tax rate falling from 22.5 mills in 2013 to 18.1 mills today. Voters already approved a $66 million mill levy override in 2023, which raised teacher and staff pay by 9%, and a $490 million bond in 2024 for projects ranging from career education to security and school improvements.

The budget squeeze is colliding with school consolidation already underway in Highlands Ranch, where the board unanimously approved pairing recommendations for six elementary schools beginning in 2026-27. Saddle Ranch Elementary, Heritage Elementary and Acres Green Elementary are among the campuses slated for consolidation as the district adjusts to shifting enrollment in parts of the county, including growth in Sterling Ranch, Ridgegate East and The Canyons. Colorado’s school finance formula also remains in flux, with new funding changes being phased in through 2030-31 before a full replacement in 2031-32, leaving Douglas County to balance reserves, staffing and school footprints while trying to avoid deeper cuts next year.