A $165.4 million drafted budget for fiscal 2027 is expected to be considered by the DeKalb School District 428 school board this summer.

The district’s spending plan, if approved as presented, could include a $2.5 million deficit, but it is not structural; instead accounting for reserve fund balance to help pay for the $50.5 million total budgeted construction cost of a new early learning development center for preschool-age students.

Of those project costs, an anticipated $7.5 million is payable in fiscal 2027 to allow the building to welcome students by fall 2029, district documents show.

Other major expenditures in the district’s tentative budget proposal include salaries, benefits and cost increases to various collective bargaining agreements.

Armir Doka, the district’s director of business and finance, described the district’s tentative fiscal year budget as a planning tool.

“It is a roadmap for us,” Doka said. “It will allow us to stay within the limits.”

The district is working under the assumption that local property taxes saw a 6.7% jump year over year, school board documents show. They foresee an expected 2% increase in the corporate personal property replacement tax compared to last year.

But there are some unknowns with the district’s spending plan, as well.

State budgets won’t be set until the end of May. As such, the district won’t have decisions on evidence-based funding, property tax relief grants, or state-mandated categories like bus transportation, free lunch and special education until then.

“It becomes an exponential issue because as we lose reimbursements, our cost is growing with our contracts,” Doka said. “Every year that deficit keeps growing, and then we have to keep our local access, so that becomes an issue.”

The district’s share of evidence-based funding may be available for fiscal 2027, but could be lower than the previous year, according to school board documents. An estimated allocation may be determined in August.

This school year, the district was designated as a Tier 3 school system, school board documents show. If unchanged, the district is projected to receive a $57.6 million allocation from the state.

Board member Kristin Bailey questioned what metrics the state is using to determine the tier into which the district falls.

“There are many points that they use in their formula,” Doka said in reply. “Their formula is actually very detailed, and that’s what worked great with this new funding formula because it was taking into account enrollment, cumulative ratios, local capacity targets.”

Board Vice President Nick Atwood asked if there is a goal to restore the district’s reserves.

“Are we putting any money back in to try to regrow that, or is this budget not including anything like that?” Atwood said.

“We have been conscious about our budgets,” Doka said in reply. “Every department leader has gone through it. We’ve been really looking, even with inflationary pressure. They have looked at anything that they can defer.”

The school board will put the district’s tentative budget proposal to a vote during its Aug. 4 regular meeting.