Rising salaries and health insurance costs, coupled with updated consumer-price index figures and new construction estimates, point to a structural deficit within Naperville School District 203’s future budgets, according to officials.
The Naperville 203 board of education and administrators had a preliminary discussion about the forthcoming budgetary challenges at a meeting on Monday, Nov. 17, and mulled strategies and timelines that could bring both sides of the financial ledger into harmony with one another.
A look at Naperville District 203’s 5-year financial forecast
Mike Frances, Naperville 203’s chief financial officer, gave a presentation on the district’s financial forecast at the recent meeting. Without any budget reductions, he noted Naperville 203 is facing years of red ink that will require dipping into cash reserves in the fund balance to stabilize finances.
Out of the gate, Frances indicated the current school year budget is facing a $29.25 million deficit, due to several factors — including, but not limited to, capital allocations for Kennedy Junior High School and the transportation facility, as well as settled employee labor contracts — that amended the original version that was adopted in June.
Looking further out, Frances is anticipating a $12.55 million deficit in Naperville 203’s 2026-27 school year budget, a $14.38 million deficit in 2027-28, a $17.86 million deficit in 2028-29, a $21.37 million deficit in 2029-30, and a $26.32 million deficit in 2030-31.
“You really have to watch the slope of that line, downward,” Frances said. “We can absorb deficits — small deficits. When they get to this level, that we are projecting at this point, the board needs to give direction as to how to deal with this.”
If no action were taken, based on the projections in place, Frances indicated Naperville 203’s fund balance would continue being drawn down until it would be completely depleted by the 2030-31 school year budget.
The projected fund balance at the end of the current school year is $66.29 million, based on the current financial forecast.
“While the current fund balance is sufficient to absorb some deficits, we will need to determine future actions that will reduce or eliminate the structural budget deficit,” Frances said.
Frances said the financial projections bring a number of other factors into the equation as well, including interest rate income, the consumer-price index, and equalized assessed value assumptions that play into the district’s tax levy cap.
Administrators share District 203’s current financial realities
In terms of addressing the structural deficit, Superintendent Dan Bridges said a decision ultimately will have to be made, and there could be painful decisions along the way.
“You think about $12.5 million out of our budget,” Bridges said, referring to the 2026-27 school year financial forecast. “I mean, that’s going to be felt, if that were the plan. That being said, maintaining this structural deficit is not something that we can continue.”
The Nov. 17 presentation did not include any specific line item reductions. More granular details on cuts within the broader budget are anticipated in the months ahead.
“I think it’s fair to say everything’s on the table, in terms of looking at how we get there, in terms of where we think we can trim a little bit at a time,” Bridges said.
When asked to provide his input on an optimal scenario to bringing the district into the black on a recurring basis, Frances said, “I don’t know if there is a ‘best of the options.’ Any option is going to be painful.”
Frances and other district officials cited current state law, and the intricacies of the evidence-based funding formula that inevitably mean Naperville 203 derives the largest share of its income from property taxes.
Additionally, Frances said Naperville 203 has been receiving the same amount in reimbursement or such mandated services or special education and transportation, even though the cost of providing such services has consistently increased each year.
Board of Education weighs in on possible strategies
The core question Bridges and Frances presented to the board centers around timeline. Should the district make immediate budget cuts in the upcoming school year to bring the budget into the black and take the pressure off the fund balance? Or, should a tiered, multi-year approach be taken with the trimming?
During deliberations, the board offered up a variety of different views on the approach, with the ultimate consensus being multiple scenarios should be presented for consideration before a vote is taken.
“Listening, and thinking through this, in the moment, I would like to see a balanced budget next year, but I want to reserve the ability to say, ‘That might be too much pain,’” board member Kristine Gericke said. “I think I would struggle until I see what it would look like for the next year. … Is it really a ‘rip the Band-Aid off’ moment, or is it a little gentler?”
Board member Marc Willensky said he would prefer the district make the necessary adjustments as soon as possible.
“The sooner we can make these reductions, the better,” Willensky said. “Otherwise, we will continue to revisit this, year after year after year, and the problem won’t go away, necessarily.”
Board President Charles Cush agreed it is in Naperville 203’s best interest not to kick the figurative can down the road.
“Once you get to a certain point, you really run out of choices,” Cush said. “Your choices are kind of made for you.”
The board and administrators will continue discussions on the deficit projection in the months ahead.
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