Naperville School District 203 officials are warning that budget cuts will need to be made as expenses are far exceeding anticipated revenues.
District administrators told the school board Monday that its five-year financial forecast will continue to be in the red unless cuts are made, and asked the board to consider how quickly it would like to see a balanced budget.
While the district has a fund balance, it cannot continue to be used for ongoing expenses, district administration said.
According to the district’s projection summary, its fiscal year 2026 estimated budget will be about $5.25 million in the red. The fiscal year 2026 budget is anticipated to have about $354.9 million in revenue and $360.1 million in expenses.
The projected fiscal year 2027 budget could have nearly a $12.6 million deficit, and the fiscal year 2028 budget may have a nearly $14.4 million deficit, which would continue to draw down on the district’s fund balance, district documents said.
“The current year has a budget deficit,” said Michael Frances, the district’s chief financial officer. “That deficit is projected to increase substantially over the next five years. While the current fund balance is sufficient to absorb some deficits, we will need to determine future actions that reduce or eliminate the structural budget deficit.”
Superintendent Dan Bridges said the district has to address ongoing costs.
“I think it’s fair to say everything is on the table in terms of looking at how we get there,” Bridges said.
Bridges said the district won’t change its mission or purpose, but cautioned that some cuts could be painful.
“I think everything is going to be felt,” he said.
The district may have to reduce or pause new initiatives that brings on new costs, look for ways to be more efficient or look at what can be eliminated, Bridges said.
“We have been in a pattern of adding programs, adding people, adding costs that we really have to kind of step back and take a look at,” he said.
Several board members said they would like to see various options that would provide the least impact to students. Some added they would like to see a comparison of the cuts needed to balance the budget immediately versus gradually over the next few years.
“What are the impacts of that balanced budget in one year, and does it makes sense to do it in two years or in three years,” board member Joseph Kozminski said.
Board Vice President Kristine Gericke said she would like to see a balanced budget next year.
“But I want to reserve the ability to say that might be too much pain,” she said. “Is it really a rip the Band-Aid off moment or is it a little gentler?”
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Board member Marc Willensky said the sooner the district makes the reductions, the better.
“Otherwise, we’ll continue to revisit this year after year after year, and the problem won’t go away necessarily,” he said.
Frances said the biggest expenses are salaries and benefits, including health insurance. From a revenue standpoint, investment income likely peaked in fiscal year 2025 as the federal government has indicated plans to cut interest rates, Frances said.
The district adjusted its fiscal year 2026 budget that was adopted in June after contracts with the Naperville Unit Education Association, the union that represents teachers and licensed staff, were settled this fall. Salaries and benefits are estimated to cost an additional $3 million over what was initially budgeted, Frances said.
The district has little debt overall and is expected to be debt-free in three years, Frances said. The district also maintains the highest financial rating from the State Board of Education.
Frances said if the district continues to run a deficit, it could impact its bond rating and ability to borrow money, if needed.