Rockford SD 205 administrators presented a tentative fiscal‑year 2026 budget update that showed a multi‑million dollar operating shortfall and warned trustees about immediate uncertainty in federal and state grant funding.

District finance staff reported an operating fund shortfall of about $3.8 million and a separate projected health‑care deficit of approximately $6.7 million; officials said total near‑term pressure reaches into the low‑double‑digit millions. Staff also reported they had learned that the U.S. Treasury was pausing distribution of certain federal grant allocations (except Title I) pending federal actions, and that the state had reduced the teacher vacancy grant from about $702,000 to $468,000 — a change the district received the day before the meeting.

To manage near‑term risk, staff outlined their assumptions and contingency levers: refining personnel and non‑salary spending decisions, reallocating some corporate personal property replacement tax (CPPRT) revenues across funds (including a $10 million CPPRT allocation toward facility work), and monitoring the U.S. Treasury subsidy on certain bonds. Staff said they might call and pay off selected bonds to avoid losing federal subsidy payments if the federal program changes.

Board members asked for clearer plans to reduce recurring expenditures and to identify which initiatives would be scaled back if grants were not available. District leaders said they will continue to tighten discretionary spending, work through a multi‑million dollar list of potential reductions, and return with a final budget in August after more information arrives from federal and state sources.

Ending: Trustees were asked to approve a tentative budget in July; staff warned that the final August budget could change if federal/state grants are adjusted. No formal final budget vote was taken at this meeting.