CFO outlines FY26 revenue outlook: property taxes and investment income buoy district, state and federal support uncertain

Mike Francis, the district’s chief school business official and CFO, briefed the board on revenue expectations for the 2025–26 fiscal year at the April 21 meeting, previewing the tentative budget the board will receive at its May 5 meeting.

Francis summarized the district’s revenue mix and identified several knowns and uncertainties: more than 85% of the district’s revenue comes from local property taxes, with the district’s 2024 levy driven by a calendar-year CPI adjustment and roughly $28 million in new construction growth included in the 2024 tax extension. That combination increased the district’s extension to $303,591,000 and yields an estimated roughly $11.3 million in additional levy revenue to support operations in the upcoming year.

Francis said investment income remains a positive story: the district received record interest income in 2024 (about $12.6 million) and expects investment earnings north of $10 million again in the current year because of elevated short-term interest rates. By contrast, the CFO flagged declines in Corporate Personal Property Replacement Tax (CPPRT) receipts: after spikes in 2021–23, CPPRT is expected to return toward longer-term normal levels (estimated about $3.6 million this year, down from budgeted estimates of roughly $5 million).

At the state level, Francis explained that Naperville 203 is a Tier 4 district under Illinois’ evidence-based funding (EBF) formula and therefore receives a modest share of state EBF increases intended primarily for higher-need districts. District 203’s EBF allocation has grown only slightly since FY18 (about $12.6 million to $12.7 million), while lower-tier districts have received larger increases. Francis warned that mandated-categorical reimbursements (transportation and special-education tuition) face proration risk when the state does not increase funding to match rising costs; for example, special-education transportation reimbursement moved from a targeted funding percentage down to a lower proration in recent years and may decline further if the state leaves line-item funding flat.

On federal revenue, Francis said the district’s federal-grant mix (IDEA, National School Lunch Program, Title I and Medicaid fee-for-service) represents about 2.7% of total revenue. He projected relatively flat federal grant levels for FY26 with modest shifts across lines and noted the district reduced its Medicaid outreach revenue projection.

Francis concluded that, taken together, the district’s largely known property-tax revenue and strong investment returns will offset some state and local funding volatility, but budget decisions will require careful prioritization; the board will receive a tentative budget draft on May 5.

Ending: The board thanked the CFO for the revenue preview and asked to schedule finance-committee follow-up meetings during the budget cycle. Francis said the finance committee typically meets two to three times per year with additional meetings as needed.