District U-46’s proposed $1.03 billion budget uses surplus money to cover $208 million deficit

Elgin Area School District U-46’s proposed 2026-27 budget calls for $1.03 billion in expenditures, $821.7 million in revenue and a $208.6 million deficit that will be covered by using surplus fund balances.

“The largest sources of revenue continue to be local property taxes at 50% and Evidence-Based Funding (from the state) at 37%,” U-46’s Executive Director of Financial Services Robyn Cornelissen said Monday night during the school board’s public hearing on the budget.

Property tax revenue is expected to increase by about $15.2 million, from $391 million to $406 million, based on anticipated growth in the district’s property tax collection, Cornelissen said. Evidence-Based Funding is expected to increase by $7.2 million, from $299 million to $306.2 million.

District officials would not disclose whether the budget as currently proposed requires an increase in property taxes. Taxes are not levied until the end of the year.

In terms of expenditures, Cornelissen said, “As a school district, our primary investment is always in the classrooms and the personnel who support our students.”

As such, salaries account for about $454 million, up from $435 million, and benefits are expected to cost $143 million, combining for 58% of overall district expenditures. While benefits are $2.3 million less than unaudited numbers for the current fiscal year, the district had expected to spend $125 million but wound up paying $145 million, according to unaudited numbers Cornelissen provided at the hearing.

The district plans to spend $216 million on capital outlays, up from $132 million, including the ongoing Unite U-46 construction projects and the purchase of new buses. All told, the proposed budget calls for spending $145 million more than the current budget based on unaudited numbers, Cornelissen said.

She noted that expenditures have steadily climbed year over year since fiscal year 2023.

“While crossing the $1 billion mark is a significant milestone for our district, it aligns with the expanding investments in our facilities and our workforce,” Cornelissen said.

Staff is projecting an ending fund balance on June 30, 2027, of $657.1 million, “which represents a planned net decrease of $208.6 million from our June 30, 2026, balance,” she said. “This planned use of fund balances is primarily related to cash funding our major capital construction projects.”

She noted that the school board has executed a deliberate strategic plan over the last several years to increase its fund balances before spending them down for two reasons: to protect against economic volatility and to aggressively save for capital construction and maintenance projects

“The Unite U-46 initiative represents a firm commitment from the board to our taxpayers to improve our school buildings, either by retiring or replacing older facilities or heavily modernizing existing ones,” she said. “A comprehensive transformation like this carries an estimated price tag of $350 million.”

Voters in April 2023 approved the issuance of $179 million in bonds. The remaining $171 million for the capital projects is being paid for through cash reserves.

“As we look ahead, district administration will continue to provide visibility into this multiyear spend-down strategy,” Cornelissen said. “The district remains fiercely committed to maintaining adequate fund balances.”

The school board is expected to vote on the budget at its Sept. 28 meeting.

Mike Danahey is a freelance reporter for The (Elgin) Courier-News.