Preliminary FY2026 budget shows fund-balance draw for facility work; district flags $1.2M drop in state mandated categorical funding

District finance staff presented a preliminary FY2026 budget that projects expenditures above revenues for the year as the board plans a multi-year drawdown of fund balance to finance capital work described as the "warm, safe, dry" facilities program.

Treasurer Tony reported through April the district had spent just over 60% of its budget while collecting about 48% of expected revenue — a seasonal cash-flow pattern the district covers with fund balance. Finance staff said the district will be debt-free after paying off outstanding bonds but will continue substantial capital investments; staff estimate roughly $50 million of facilities work over five years to address maintenance and upgrades.

Staff warned trustees of a separate issue: an apparent $1.2 million reduction in state reimbursement for mandated categorical programs (special education and transportation) driven by limited state resources and increased proration. Tony explained that Illinois is directing additional money into the evidence-based funding formula while mandated categoricals face proration, which reduces the district’s expected reimbursement in FY2026.

The preliminary budget document is a new, ASBO-style format that includes multi-year forecasts, staffing assumptions, and tax-rate projections. Staff asked for board feedback on the document format and noted the board will see a tentative budget in June, a public hearing in July, and final adoption in August.

Why it matters: The FY2026 preliminary budget signals that the district plans to spend down fund balance to finish deferred facilities projects and that state funding uncertainty — notably an estimated $1.2 million proration on mandated categoricals — will constrain operating revenues and could require future adjustments to preserve the ISBE financial profile score.