Sterling schools braced for modest gains, ongoing uncertainty under new state education budget

The Illinois State Board of Education’s announcement of a $15.85 billion education budget for fiscal 2026 has drawn cautious optimism from Sterling Public Schools as the district awaits final details of its allocation under the state’s evidence-based funding formula.

Although the overall state education budget declined because of the sunset of federal COVID-19 relief funds, the state simultaneously increased General Fund support for public education by almost $279 million and a $307 million increase to the EBF formula.

The EBF model

The model places school districts into four tiers based on how close they are to reaching their adequacy target, the state’s calculation of how much funding each district needs to properly educate its students. Tier 1 districts are the farthest from this target and have the largest funding gaps, so they get the largest share (50%) of new state education dollars.

Tier 2 districts are slightly better but still fall short of full funding (below 90% adequacy). They receive 49% of new state funds.

Although that funding model has played a pivotal role in stabilizing districts like Sterling’s in recent years, the local impact of that $307 million EBF increase remains unclear. SPS Director of Finance Matthew Birdsley said the district has yet to be notified of any additional funding for its Tier 1 services.

Last year, SPS shifted from Tier 1 to Tier 2. That change could mean a reduction in new funding this year.

“Last year, we received just under $300,000 in additional tier funding. For this year’s preliminary budget, I have roughly projected about another $250,000 increase,” Birdsley said. “If that comes true, then we’ll be sitting well with about a $50,000 surplus in our Education Fund for the year. If we end up back in Tier 1, we’ll get more than the $250,000 that we projected.”

Preparing for uncertainty with conservative planning

While waiting on final EBF allocations, expected in early August, SPS has built its tentative budget on cautious assumptions and by emphasizing long-term sustainability.

“We’re always looking at that 3- to- 5-year projection model,” Birdsley noted. “We want to make sure that we can continue programs with our current funding and not rely on new funding.”

One area of potential strain is transportation. Although the ISBE announced a $19.8 million increase in mandated categorical funding statewide, that has not translated to a boost for school transportation.

“That was not increased. It was reduced, slightly prorated,” Birdsley said. “Transportation is critical, and it’s expensive.”

Birdsley plans to keep a watchful eye on the district’s Transportation Fund despite expecting a $25,000 surplus this year.

SPS’s fiscal strategy during the pandemic is now providing crucial stability. During that time, Birdsley said SPS avoided adding positions tied to short-term COVID relief funds.

Instead, the district invested in one-time purchases, such as updated technology and specialized instructional tools. That foresight has helped SPS avoid layoffs or program cuts in the wake of expiring federal funds.

Meanwhile, Birdsley said current federal grants like Title I and IV continue to support literacy, math intervention and school safety.

One notable hiccup has been the delay in receiving Title II funds.

“Last year, our Title II funds were around $180,000, and we used about $95,000 for professional development,” Birdsley said. If those funds do not materialize, the district plans to cover the costs from local funds.

The ISBE’s budget also pauses the state’s $50 million Property Tax Relief Grant. For Sterling, that change is inconsequential.

“We never received that,” Birdsley confirmed. “So that removal has no impact on Sterling Public Schools.”

Early childhood education support

Despite flat statewide funding for early childhood education, SPS’s preschool programs remain unaffected thanks to local support.

“Our board of education has always supported our preschool programs,” Birdsley said. “We use local funds to help offset what the state does not cover.”

The district also is holding steady on staffing and services for students with disabilities, English learners and low-income families, with no staffing cuts expected into the current fiscal year, “... nor do we expect any,” Birdsley said, citing Title I and Individuals with Disabilities Education Act funding as stable supports.

Looking ahead

With more than 80% of the SPS budget tied to salary and benefits, the district remains sensitive to even small shifts in funding.

“To improve our current programs or increase staffing levels, we just need additional funding,” Birdsley said. “If we can maintain where we’re at, we feel that we’ll be in a good spot.”