Orange County Public Schools is concerned about relying on voters to renew a special property tax and plans to borrow against future tax revenue as it moves forward with a nearly $7.9 billion budget for the 2026-27 fiscal year, an increase of about $500 million from last year.
This comes after the district reported losing nearly 8,000 students resulting in a loss of $8.5 million dollars.
The budget passed Tuesday after a public hearing during which teachers, community members and board members raised concerns about teacher pay, class sizes, insurance costs, vouchers and how the district is managing its money.
The biggest increase is in the Capital Projects Fund, which increased by $230.5 million more this year, totaling $3.97 billion.
The fund pays for construction and major renovations. About 56% of that money is going toward schools built before 2003, including renovations based on the age of buildings and projects to repurpose existing schools.
“I cannot describe the gravity of the situations that my colleagues are expressing to me at work."- Anatomy and physiology teacher Asma Almani
The district is also continuing to build new schools, despite the drop in enrollment. Ovation and Innovation elementary are the only two new schools slated to open.
Board member Alicia Farrant raised concerns about the district’s construction plans.
“Only opening two schools in 10 years is wild,” she said.
The district’s General Fund totals about $2.95 billion, an increase of $129.2 million from last fiscal year.
That fund pays for the district’s day-to-day operations, including teacher salaries, transportation, maintenance and administration.
Board member Stephanie Vanos said the enrollment numbers raise questions about what’s changing in the district and why.
“We need to look at all of the reasons we see declining enrollment,” she said.
Declining enrollment and school funding can also affect what happens inside classrooms, Vanos said. It’s also true that when schools don’t have the funding they need, they don't have as many people in schools and class sizes increase and teachers’ workload increases.”
Members of the community also raised that issue during the public hearing.
Anatomy and physiology teacher Asma Almani told the board she is hearing serious concerns from her colleagues.
“I cannot describe the gravity of the situations that my colleagues are expressing to me at work,” she said.
Almani said OCPS is losing “great” teachers and described her own classroom as packed with as many as 39 students. She said she relies on donations to cover classroom needs.
“I have to go ask for donations., I have to go beg for money,” she said. “Put your money where your mouths are, because words don’t pay bills or medical care or things that are needed in the classroom.”
Insurance is another growing cost
The district’s Internal Service Fund is about $448.3 million, up $35.2 million from last year.
That fund covers employee health insurance, property and casualty losses and printing services.
Health insurance is a major challenge –- and a point of contention – for the district.
OCPS said it is spending about $20 million a month because it has not yet made a decision about changes to its health insurance plan. District officials also said contributions toward employee health coverage are not keeping pace with the cost of claims.
“We have an insurance issue,” Farrant said. “I would love to look into our policy to allow people to discuss things.”
The district’s Special Revenue Fund is about $341.4 million, up roughly $1.2 million from last year.
That fund includes federal categorical grants, donations, food service, extended-day programs and school internal accounts.
Through that fund during the 2026-27 school year, all OCPS students will receive free meals regardless of income.
But Superintendent Maria Vazquez said this will be the last year for that arrangement.
She said the district is working on a plan to return to an application process. Some schools will still qualify for the federal Community Eligibility Provision, while others will not. District officials said eligibility will be based on the number of families at each school who qualify for assistance.
Debt and short-term borrowing
The Debt Service Fund pays the principal and interest on money the district has borrowed. It totals about $202.3 million, which is down about $21.5 million from last year.
OCPS is also preparing to make a fiscal move it hasn’t made since in the Great Recession of 2008. It will borrow money through Tax Anticipation Notes, or TANs.
The district plans to authorize up to $250 million in short-term borrowing to help with cash flow before it receives most of its property tax revenue. About half of the district’s funding comes from property taxes.
Board members questioned whether the borrowing is a sign of a larger financial problem.
Member Maria Salamanca said the idea makes her uncomfortable.
“It makes me super anxious to have anything like this,” she said. “It’s like a credit line on day-to-day expenses.”
Millage and teacher pay
Orange County voters will decide in November whether to renew a special property tax expected to bring in about $255.2 million for the 2026-27 school year.
According to OCPS, the funds will help protect teacher compensation, academic programs, fine arts and athletics across the district.
Board member Angie Gallo said OCPS is “way too reliant on that millage right now,” and that losing that revenue in the coming years could have a major impact on the district.
Superintendent Maria Vazquez said about 10% of the district’s operating budget is tied to the millage, and 99% of the tax revenue is connected to recurring salaries or teaching positions.
“If that were eliminated that would be catastrophic to our district,” Vazquez said.
The budget hearing
During the public hearing, Clint McCracken, Orange County Classroom Teachers Association president, questioned the district’s approach to staffing and accountability.
“When school positions disappear, students' needs do not,” he said. “Everyone seems to pay for the district's budget decisions except for the people making those decisions.”
Vazquez said the district has been working on the budget since January and adopted a tentative budget in July. She said more information will be released about the budget cuts, but the district has already cut or eliminated positions at the district level, most of which were already vacant.
The final budget now sets OCPS’ spending plan for the 2026-27 fiscal year as the district works to balance fewer students with higher costs for salaries, insurance, safety and other services.
