Rockford board hears CFO's warning of multi‑year deficits, approves preliminary FY26 budget

CFO Bridgette Peterson presented a high‑level preliminary budget the Rockford Public School District Board of Education on May 19, projecting a $405,000 operating loss for FY26 under conservative assumptions and flat enrollment. The board moved and unanimously approved the preliminary FY26 budget as presented.

Peterson told the board she modeled revenue increases tied to state formulas (a 2.74% general‑education increase used for FY26 and 2% in FY27 in her baseline) but emphasized those increases apply to only about half the district's revenue. With enrollment modeled at roughly 1,531 average daily membership the district cannot rely on state percentage increases alone to close the gap between revenues and rising costs, she said. "When I do that, keep enrollment flat, apply some revenue increases, and apply some expenditure increases ... you can see ... I am projecting a $405,000 loss," she said.

The CFO highlighted several cost drivers: transportation and utilities increases, automatic step/experience roll‑ups in teacher salaries and a range of assumed increases in other expense lines. In Peterson's scenario, the projected shortfall grows to about $800,000 in FY27 and approximately $1.3 million in FY28 if no adjustments are made. She also noted a sharp decline in forecasted interest earnings used in the draft (an example change shown in her slides: from roughly $350,000 down to $50,000), which further stresses the general fund.

Peterson described options the district is evaluating to mitigate pressure on the general fund, including a targeted spend‑down of certain restricted funds within program rules, shifting allowable costs between funds (charge‑backs to the nutrition fund for administrative support, for example), and closely scrutinizing future staffing and contract choices. She stressed the projections are draft estimates and that administration will continue to refine numbers before final adoption.

Board members asked clarifying questions about enrollment assumptions, transportation costs and where savings could realistically be found. Chair Eric Gordy noted the board and administration have begun discussing difficult choices earlier than in prior years: "This is our current reality ... we have to potentially change some things, make some tough decisions," Gordy said during discussion.

Following discussion, the board voted to approve the preliminary budget, which enables the district to publish required public notices and to continue detailed budget work before final adoption. Peterson said next steps include continued scrubbing of technology and other line‑item numbers and follow‑up work with the finance committee. The board will return to the budget for adoption at a later meeting after additional analysis and any new legislative updates are evaluated.

Context and next steps: Peterson framed the presentation as intentionally conservative to leave room for statewide legislative changes under discussion. Administration will report more detailed figures and any recommended changes before final adoption; the superintendent and CFO emphasized that enrollment shifts or legislative action could materially change the projections.