Flossmoor School District 161 officials presented a tentative 2026-27 budget on Monday, June 16, that projects an operating surplus next year but cautioned that the district’s long-term financial outlook depends heavily on continued state Property Tax Relief Grant funding.
Associate Superintendent of Business Operations Frances LaBella told board members the tentative budget projects an overall deficit when construction spending is included, but the district’s operating budget remains in positive territory.
“This surplus position is primarily driven by an assumption that the district will qualify for an additional Property Tax Relief Grant,” LaBella said during the presentation.
District projections assume the district will again receive the state grant, which has provided property tax relief for local taxpayers while increasing state funding. LaBella said District 161 has ranked high on the state’s eligibility list in recent years and expects to remain competitive for the funding.
Under the tentative budget, total revenue is projected at approximately $53.4 million for fiscal year 2027, while expenditures are projected at about $49.9 million. The budget assumes the district will receive roughly $1.8 million in additional Evidence-Based Funding through the Property Tax Relief Grant program and continue receiving about $200,000 annually in tier funding.
Officials said salary and benefit costs remain the district’s largest expense. Assistant Business Manager Kendall Gant said salaries account for roughly 52% of expenditures and are expected to increase based on existing collective bargaining agreements, while medical insurance costs are projected to rise by about 8%.
Board members spent much of the discussion focusing on the district’s financial outlook beyond the next few years.
LaBella said projections show the district remaining financially stable through the forecast period, but warned that the Property Tax Relief Grant remains a major factor in maintaining healthy reserves.
“Without the renewal of it, and you just assuming that 2.5% levy, the district would have gone into deficit spending within two years,” LaBella said.
According to district projections, fund balances could decline by roughly $8 million to $9 million over the life of the forecast if the district no longer qualifies for the grant. Even so, officials said reserves would remain above the board’s policy minimums.
Board Member Michael Rouse III urged the district to begin discussing long-term strategies now rather than waiting for future deficits to materialize.
“We cannot be complacent because we have a year where our funding is an abundance,” Rouse said.
LaBella acknowledged the concern but noted that the current projections show a surplus of approximately $3.5 million next year.
“I struggle with what problem are we trying to solve when I’m looking at bringing you a $3.5 million surplus,” she said.
Board Member Cameron Nelson suggested the board revisit the issue after the district’s new superintendent begins work, allowing the administration and board to discuss priorities for addressing any future operating deficits identified in long-range forecasts.
The tentative budget will be refined over the summer as administrators review expenditures on a line-by-line basis. District officials plan to provide board members with a detailed budget book in August, followed by a budget presentation Aug. 24 and a public hearing and final budget adoption Sept. 14.
