Lake Washington School District leaders reviewed options on Aug. 4 for renewing the four-year education programs and operations (EP&O) levy, with staff saying declining enrollment, rising local compensation costs and uncertainty about federal grants have increased the district's local funding gap.

Associate Superintendent Posthumous summarized the budget drivers underlying the levy choice and the presentation the district has taken to advisory committees and the community. "This is the I think the fourth time that, we've had the the conversation related to levy planning," Dr. Holman said, noting the discussion reflects the complexity and importance of the board's decision. Posthumous told the board the EP&O levy currently pays for programs and staff that the state does not fully fund and provides roughly 16% of the 2025-26 budget.

The district explained why a levy ask now requires forecasting several years ahead. Posthumous said four-year levies require estimating roughly six years into the future because of the election and collection timing, and that creates risk when enrollment and cost assumptions change. Staff presented two main options: ask voters for full levy authority (a tax-rate estimate beginning near $1.00 per $1,000 of assessed value and declining to about $0.93 by year four under current estimates), or pursue a graduated approach that steps up to full authority by the fourth year and keeps an average rate nearer to $0.93 per $1,000.

Staff outlined the drivers widening the local funding shortfall: a projected net four-year enrollment-related reduction of roughly $3.5 million; state-mandated compensation increases including COLA, health insurance and pension costs totaling about $20 million over four years; and fixed-cost increases (utilities, insurance) of about $6 million. Together, staff estimated a roughly $30 million four-year expenditure increase; after $7.5 million of budget realignment and $1 million of recently restored federal funds, the net additional pressure was described as about $19 million over the multi-year period.

Posthumous also described how local salary "step" increases affect the district: "the impact of kind of our step increases for both certain classified is around $3 to 5,000,000 a year," she said, adding that over four years that could total in the low- to mid-teens of millions. Board members pressed staff to make those step-cost assumptions clearer in long-range budget projections.

Directors discussed trade-offs between leaving levy authority unused and asking voters for higher authority that might trigger public resistance. Director Liberty said she was "having a hard time reconciling" a presented estimated local need of about $129.3 million with current collections, and urged clearer year-by-year maintenance-level figures. Director Stewart said the district should be mindful of taxpayer fatigue and favored a graduated approach, calling it a way to "stair step" increases so voters see smaller, gradual changes rather than a larger leap.

Posthumous framed the district's planning approach as a hedge against uncertain future conditions: flat-enrollment assumptions in levy planning preserve capacity if enrollment doesn't drop as projected; if enrollment declines, OSPI's levy-authority calculations (which are lagged and based on earlier enrollment) could force a rollback of collections. "We're entering a school year that more than likely we're gonna see a decline in student enrollment given our current data," she said, noting that if actual enrollment falls below the plan the district would not be able to collect full authority without rollback.

No formal motion or vote was taken; Posthumous said staff will meet with the levy advisory committee the following week and return a formal recommendation to the board in September with possible board action in October. She noted required next steps including a pre-ballot submission to OSPI and a December resolution deadline to appear on a Feb. 10 election ballot.

The board asked staff to provide clearer, year-by-year figures for (1) the district's maintenance-level need, (2) the effect of enrollment declines on levy authority and tax rates, and (3) how step increases and other compensation drivers are represented in long-term assumptions. Staff agreed to refine those scenarios before the formal recommendation.

The study session was a discussion-only item; no levy measure was approved at the meeting.