Indian Prairie District 204 projecting a $5.8 million budget deficit for current school year

Indian Prairie School District 204 is facing 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 is considering ways to save money — including staff reductions and attempts 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 expects operating revenues to increase at roughly 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 the Aug. 24 school board meeting.

The district is accounting for a planned 2.7% increase in the overall property tax levy in the tentative budget, Shipley said.

But state and federal revenues are expected to grow at less than 1% annually, according to Shipley.

He also said the district lost 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. The rest goes to things like purchased services and supplies and materials.

The district is seeing significant increases in costs for certain things, including special education transportation, out-of-district tuition and employee health insurance plans.

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.”

Nevertheless, he said District 204 is in a good position to handle those challenges, pointing to the district’s 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.

While the district expects a $5.8 million operating deficit this year, Shipley said the district is 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.

For example, the district plans 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.

Shipley said Indian Prairie is also looking at ways to control rising substitute teacher costs, including 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.

Indian Prairie’s school board is expected to vote on the proposed budget at its Sept. 28 meeting.

mmorrow@chicagotribune.com