Indian Prairie School District 204 is looking at a $5.8 million deficit in its operating budget this school year, with plans to adopt the budget next month following a school board vote.
To cut costs, the district has taken or is looking at a number of different ways to save money — including staff reductions, analyzing the value of different initiatives it funds and attempting to reduce substitute teacher costs, according to district officials.
But, despite its financial challenges, Indian Prairie should be able to balance its budget in the years to come, according to the district’s Chief School Business Official Matt Shipley.
The tentative budget under consideration is for fiscal year 2027, which began on July 1 and extends through June 30, 2027.
The projected operating budget revenues for the 2026-27 year total about $470.6 million, up around $15 million from last year. Projected operating expenses for the year, meanwhile, total about $476.4 million — an increase of more than $21 million from the year prior, per the district.
According to Shipley, the district is expecting operating revenues to grow around the rate of inflation, primarily due to local property tax growth.
Property taxes make up about 78% of the district’s total operating revenue, a slight increase from last year, Shipley said at Monday’s school board meeting, at which the tentative budget was discussed.
Nevertheless, because of property value growth, the actual property tax rate for the district has continued to decrease, he said, though he noted that the tax burden has shifted somewhat from commercial and industrial property toward residential properties. The district is accounting for a planned 2.7% increase in the overall property tax levy in the tentative budget, Shipley said, which is set to be voted on by the school board later this year.
State and federal revenues, on the other hand, are expected to grow at less than 1% annually, according to Shipley.
He also pointed to the district seeing a loss of a little over $1 million in Title I federal funding this year. That has to do with the poverty rate — based on census data for the area the district covers, not the district’s enrollment itself — dipping below 5%.
On the expense side, more than three-quarters of the district’s expected operating costs are for salaries and benefits, according to Shipley’s presentation on Monday. The rest goes to things like purchased services and supplies and materials.
The district is seeing significant increases in costs for things like special education transportation, out-of-district tuition and employee health insurance plans, per the presentation.
Overall, Shipley characterized the district’s situation as “one of the more challenging operating environments (it has) had over the past five to 10 years.”
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Nevertheless, he described the district as in a good position to handle those challenges, pointing to, for example, its property tax base, adequate reserves and its funding for a major facilities overhaul by way of issuing $420 million in bonds, enabled by the passage of a referendum question in 2024.
And, while the district is expecting a $5.8 million operating deficit this year, Shipley said the district’s looking at balanced budgets again starting next year.
As for what the district is doing to save money going forward, Shipley pointed to a few things at Monday’s meeting.
For example, the district is planning to reduce its staff by about 20 full-time equivalent positions, he said. That includes an increase in special education staff, offset by a reduction in other staff.
The district reduced its staff by 10.5 full-time-equivalent positions last year.
Indian Prairie is also looking at growing substitute teacher expenses, Shipley said, and looking at how it can control those costs — like minimizing avoidable teacher absences for things like professional development. The district’s school board also recently approved a pay cut for retired teachers who work as substitutes.
The district is also working to “categorize all the initiatives and all the items (it has) brought forth as a district that have resulted in additional spend(ing) above what you would consider to be the bare minimum services provided by a school district,” according to Shipley. It has identified about 200 initiatives that it is collecting cost and results data on.
As for planned capital expenses, the district is continuing on with its bond issuance-funded facilities work.
The bonds are to be paid for using a continuation of an existing 37-cent property tax per $100 of equalized assessed value that would otherwise have expired at the end of 2026, meaning the tax rate for residents in terms of their contribution to capital projects would effectively remain flat.
Work on those projects is set to extend through 2032, but Shipley said at Monday’s meeting that the district is looking to accelerate some of the referendum-funded work. That would not only allow the district to benefit from those improvements earlier, but would also allow the district to save money by way of reducing potential cost increases for the work and allowing the district to start repaying the bonds it issued sooner.
The district’s tentative budget can be viewed at https://ipsd.community.highbond.com/document/79c1a1fe-d3b0-4115-b6f3-c8be65fad054/.
Indian Prairie’s school board is expected to vote on the proposed budget at its Sept. 28 meeting.