Dixon Public Schools administrators plan to temporarily stop hiring new staff to reduce spending and balance the district’s budget over time.

The district’s fiscal 2026 budget, approved Sept. 24, estimates it will operate at a $1.6 million loss because of major federal funding declines and rising insurance costs. The district expects those trends to continue and estimated an operating fund loss of $8.2 million by fiscal 2028 if no changes were made, DPS Superintendent Margo Empen told Shaw Local.

[ Dixon Public Schools discussing budget cuts due to federal grant cuts, high insurance costs, lower enrollment ]

At Wednesday’s school board meeting, Empen told the board that district administrators have come up with a plan to save money without cutting existing positions.

“We have a fantastic staff that we don’t want to let go,” Empen said. “Any time you have to RIF [lay off] staff, the impact and hit on culture and climate ... is horrible. I don’t care if it’s one or if it’s 20, it’s just very hard.”

Instead, Empen said, the district can implement a hiring freeze for the next two to three years.

DPS Business Manager Marc Campbell explained that if an existing teacher leaves their position, the district will first look for a solution internally and ask building administrators, “Can you absorb that class? Can you change the schedule?”

“Staff will have potential movement and some force transfers to accommodate the needs across the district. We feel that is a better spot to be in than having someone lose their job,” Empen said.

“The volume of our staff cannot increase. It needs to begin decreasing,” Campbell said.

That’s because staff salaries are paid from the district’s education fund, which also covers employee health insurance costs. Those costs have been increasing over the last several years, and the district expects a deficit of about $2.7 million due to insurance in fiscal 2026, Empen said.

It’s also because some salaries have been covered by federal Title I and IV grants. Empen said Dec. 17 the district lost between $70,000 and $100,000 of funding to its federal Title I, II and IV grants. At Wednesday’s meeting, she said the district lost $500,000 from Title I.

Another factor is that student enrollment numbers have decreased significantly over the past several years, so the district’s goal is to start balancing out some of its class sizes, Empen said.

Staff reductions will be largely driven by upcoming retirements. Fiscal 2028 is “the big kind of balancing year that we hope to get us to” with 16 teachers retiring, Empen said.

A few positions will still need to be filled by a new hire. Right now, the district anticipates three administrators to retire in the next two years, and those positions will need to be filled, Empen said.

Other things district administration recommends are temporarily delaying certain purchases unless they’re really needed, moving some paraprofessionals back into the classroom and using a different fund to pay for its school resource officer, Empen said.

The district is also bringing in revenue from Thomas J. Dempsey Therapeutic Day School, which opened in August 2024 as a transition school for students with disabilities. Expanding that school would help boost the district’s education fund, which covers insurance costs and employee salaries, Empen said.

With this plan, the district still will have a deficit budget, but that should gradually reduce over the next couple of years, Campbell said.

“This is much better news than we thought,” Board President Linda Wegner said.

“I love the fact that you guys were able to come up with ideas and options for us to not have to RIF any teachers or any staff,” Board Secretary Melissa Gates said.

“I think we’re all very impressed,” Board member David Fritts said.

“There will be movement. It’s a puzzle piece of moving people where they’re needed instead of losing a job,” Wegner said. “It has to happen because of the federal funds that are gone. We’re trying to still give those same services to our students without the funds that we normally have.”