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Palos Heights SD 128 staff warn of structural deficit, project reserve shortfall by FY27
Summary
District staff told the Board on Aug. 25 that revenue growth is likely to lag expense growth, projecting the district will fall below the recommended six‑month reserve beginning in FY27 unless steps are taken to reduce the structural deficit.
Dr. Grossi presented the FY25 closeout and a multi‑year financial outlook at a special finance meeting of the Palos Heights School District 128 Board of Education on Aug. 25, 2025. Staff outlined revenue assumptions (real estate taxes growing at CPI but historically capturing about 77% of inflation), a 2.9% maximum levy cap, and expected declines in interest earnings and flat federal and state grant support.
The presentation projected annual expense growth of roughly 3.3%—about 2 percentage points higher than projected revenue growth—and warned that "the district is projected to fall below the recommended six-month expenditure reserve beginning in FY27," a point Dr. Grossi emphasized. Board members acknowledged the need for proactive planning to address the structural deficit, including potential adjustments to expenditures or future levy decisions. No formal action or vote on budget changes was taken at the meeting.
