Okaloosa County School District Superintendent Marcus Chambers told the board at its Dec. 8 workshop that declining enrollment combined with money flowing through the Family Empowerment Scholarship (FES) program is creating a significant fiscal challenge for the district.

Chambers said the district’s current student body stands at 27,829 and noted that, across Okaloosa, state‑funded scholarships — including FES and PEP allocations — reduce the number of students for which the district receives state FTE funding. “There are 4,935 scholarships in Okaloosa,” Chambers said during his presentation, adding district staff estimate roughly 3,300 FES recipients and about 1,633 other scholarship allocations.

Why it matters: the district presented an illustrative tally showing about $30,000,000 associated with FES and another $13,000,000 with PEP‑style scholarships — a combined outflow of about $43,000,000 that “comes in and goes right back out,” in the superintendent’s words. Those dollars leave the district’s FTE funding base and complicate multi‑year budgeting as enrollment projections are revised downward.

Board members and staff emphasized multiple causes: expanded school choice options and scholarships, long‑term demographic change (falling birth rates and lower fertility noted in state‑wide forecasts) and local housing patterns that leave many neighborhoods with few school‑age children. As Chambers put it, the district is seeing “the tale of two counties” with growth concentrated in the North End and declines south of the Shoal River.

District response and near‑term actions: Chambers said staff will present a recommendation to the board at its Jan. 12 meeting focused on options for balancing operations if current enrollment forecasts hold. He outlined several policy levers under review: administrative reorganizations (staff estimated a first‑step restructure would save $358,954 across the coming year), tighter enrollment tracking, reviewing co‑location with charter schools, and targeted community outreach. “We have to be responsible with the dollars that we have and make decisions accordingly,” Chambers told the board.

What the board discussed: members asked for clearer data on how many scholarship recipients never attended Okaloosa schools (staff said roughly three‑quarters of the FES recipients did not previously attend district schools) and pressed for more precise fiscal modeling. Several board members urged stronger communications with community partners — including county commissioners, chambers of commerce and military base liaisons — to address housing affordability and workforce recruitment, both of which the district identified as contributors to enrollment pressure.

Context and next steps: staff said the district’s 10‑year forecast projects net K‑5 losses of roughly 604 students countywide and larger declines south of the Shoal River; high‑school and middle‑school projections vary by zone. Chambers said the district will continue monthly and quarterly enrollment monitoring and will return with detailed recommendations in January, including specific cost‑reduction steps and potential policy changes.

Provenance: Superintendent presentation and board discussion summarizing FES and enrollment forecasts (district presentation, Dec. 8 workshop).