School District U-46 is proposing a $1.03 billion budget for the 2026-27 school year that shows a $208.6 million deficit — but district officials say the gap is by design, not a sign of financial trouble. The shortfall will be covered using surplus fund balances the district has been building for years specifically to pay for its ongoing school construction and renovation push.
The budget, which projects $821.7 million in revenue against $1.03 billion in expenditures, was detailed in reporting by the Chicago Tribune. Proposed spending is $145 million more than the current budget based on unaudited numbers, and the district's school board is scheduled to vote on the plan on September 28. Robyn Cornelissen, U-46's executive director of financial services, said local property taxes remain the district's largest revenue source at 50%, with evidence-based funding from the state making up 37%.
Where the Money Is Actually Going
The district's ending fund balance is projected at $657.1 million as of June 30, 2027 — a planned net decrease of $208.6 million from the balance on June 30, 2026. That drawdown reflects a deliberate strategic plan: the district built up its fund balances over time specifically so it could spend them down on capital projects, according to the Tribune's reporting. Cornelissen said the district's primary investment continues to be classrooms and personnel supporting students, even as capital spending dominates headlines.
Capital outlays are set to jump to $216 million, up from $132 million, driven largely by ongoing construction tied to Unite U-46, the district's facilities master plan, along with new bus purchases. Unite U-46 is a board commitment to modernize school buildings by retiring or replacing older facilities and heavily renovating others, with an estimated total price tag of $350 million. U-46 voters approved $179 million in bonds for the plan in April 2023, and the district is drawing another $171 million from cash reserves to fund it, per figures included in district board materials.
New Buildings Replacing Aging Campuses
The construction tied to Unite U-46 has already reshaped several campuses across the district's 90-square-mile footprint spanning Cook, DuPage, and Kane counties. In March 2025, the district broke ground on a $30 million, 46,000-square-foot addition at Kenyon Woods Middle School in South Elgin, while construction on a $25 million, 53,000-square-foot addition at Kimball Middle School in Elgin was scheduled to begin April 7, according to the Daily Herald. Both additions expand capacity to 1,125 students each, accommodating sixth graders transitioning into middle school.
The following month, the district broke ground on an entirely new $110 million, 193,000-square-foot middle school at 2604 Rohrssen Road in Elgin, adjacent to Hilltop Elementary School, with completion expected in August 2027. The district also spent $53 million renovating and expanding the former Hawk Hollow Elementary School in Bartlett into a 750-student middle school, which opened to seventh graders this fall after the original elementary school closed following the 2022-23 school year, the Daily Herald reported.
Not every building is being replaced quietly. Under the Unite U-46 plan, Abbott Middle School and Ellis Middle School in Elgin are scheduled to close at the end of this school year as the upgraded and new middle schools come online, according to earlier reporting by The Courier-News. District administrators also outlined plans to convert the Illinois Park Center for Early Learning back into an elementary school and to build a new elementary school on the former David C. Cook site in Elgin, per a report cited by Citizen Portal.
Salaries, Benefits and a Tighter State Formula
Rising personnel costs are also pushing up the budget's bottom line. Salaries are expected to account for about $454 million, up from $435 million, while benefits costs are projected to total $143 million — slightly less than the $145 million unaudited current-year figure, which had come in above the original $125 million estimate. Together, salaries and benefits make up 58% of the district's overall expenditures, per the Tribune's reporting. Expenditures have climbed every year since fiscal year 2023, the outlet noted.
On the revenue side, the district's property tax collections are expected to increase by about $15.2 million, from $391 million to $406 million, though the district did not disclose whether the proposed budget requires an actual increase in the tax rate. Evidence-based funding from the state is expected to rise by $7.2 million, from $299 million to $306.2 million. That modest state increase comes against a broader backdrop: according to Chalkbeat, U-46 was downgraded from Tier 1 to Tier 2 under Illinois' Evidence-Based Funding formula last year due to shifts in enrollment and low-income student counts, a change that resulted in $4.8 million in new state funds — nearly $14 million less in new state money than the district received the previous fiscal year.
The formula gap reflects a deeper structural issue. Illinois State Board of Education data for FY2025 showed U-46 funded at just 71.4% of its calculated Adequacy Target, a benchmark. That underfunding coincided with the district reinstating instructional material fees for the current school year after waiving them for five years using federal COVID-19 relief funds that expired in September 2024, according to the district.
A District Built for Scale
U-46 serves more than 33,000 students across 90 square miles in 11 suburban communities, making it the second-largest public school district in Illinois, operating 38 elementary schools, eight middle schools, and five high schools, with plans to reduce the elementary-school total to 35 in 2026-27. Dr. Suzanne Johnson has served as superintendent since July 1, 2023, overseeing an administration managing more than 7,000 employees as the Unite U-46 plan moves forward.
District officials maintain that despite the scale of the drawdown, U-46 remains committed to maintaining adequate fund balances going forward, with administration set to provide the school board visibility into the multiyear spend-down strategy. Fund balances, per the district, exist to save for capital construction and maintenance while also protecting against economic volatility — a cushion officials say is now doing exactly what it was built for as the district races to open new middle schools and retire aging campuses across Elgin and its surrounding communities.
