District 202 is experiencing a reduction of approximately $7 million annually in state Tier funding following its reclassification from Tier 1 to Tier 2 status. Unless District 202 is restored to Tier 1 status, these funding challenges are expected to continue compounding in future years.
Before the state funding formula changes that increased funding to Chicago Public Schools while reducing funding for several suburban districts, District 202 consistently qualified as a strong Tier 1 district. Before those changes took effect, the District projected only two years of modest budget shortfalls before returning to a balanced budget under current programming levels.
As a result of these ongoing funding reductions, District 202 has been forced to evaluate difficult cost-saving measures, including potential staffing reductions and increased class sizes for the 2026–2027 school year.
Assistant Superintendent of Business and Operations Richard Engstrom is responsible for managing an approximately $450 million annual budget. Each year, the District’s budget undergoes a thorough review process that includes multiple Board of Education committee meetings, a public hearing, and final approval by the Board of Education.
District 202 develops its budgets using realistic forecasting methods designed to ensure fiscal accuracy and transparency. Unlike many private-sector budgets that may include built-in padding, the District maintains an internal goal of staying within plus or minus 1 percent of budget projections, a standard widely regarded as highly accurate in the financial industry.
During the May 13 Site and Finance Committee meeting, Barbara Seiden, the committee chairperson and board vice president, requested clarification about why salary and benefits expenditures were projected to exceed year-end budget forecasts by approximately $5 million.
“I would much rather have transparent conversations about issues that are identified and addressed than have our community question the integrity of our budgeting process,” Seiden said.
The projected variance represents approximately 1.6 percent of the total salary and benefits budget.
Monthly financial reports presented since October 2025 have consistently reflected rising staffing and benefit variance due to the District’s need to add personnel throughout the school year.
Addresses Budget Forecast Variance
Recent public discussion has focused largely on staffing expenses related to employee movement on the salary schedule. Specifically, the District experienced a significantly higher-than-anticipated number of educators advancing to higher salary lanes after completing additional graduate coursework and professional development.
In a typical year, salary increases associated with lane advancements total approximately $200,000. This year, those increases reached almost $900,000, reflecting educators’ continued investment in professional qualifications and instructional expertise.
The approximately $700,000 increase in salary lane advancement costs was not the result of budget reductions or cost-cutting measures. Rather, it reflected an unusually high number of educators advancing on the salary schedule after completing additional graduate coursework and professional development. The District’s broader financial pressures stem from the loss of approximately $7 million annually in Tier funding following changes to the state funding formula.
The majority of the remaining variance resulted from higher-than-expected student enrollment movement and transfers, which required the District to hire 20 additional certified staff members, 10 paraprofessionals, and one therapist beyond staffing projections established at this time last year. In addition, a $88,400 increase from last year in stipends was paid to high school teachers who assumed additional course assignments. These staffing adjustments occurred after the budget had already been approved.
Staffing decisions for the 2026–2027 school year have not yet been finalized. Teachers may receive tentative class assignments with the understanding that adjustments could still occur.
“When I first ran for the Board of Education, improving transparency was one of my top goals as I believe it is foundational to trust and accountability,” Seiden said.
“Part of this has been working with our District’s administrators and my fellow board members to create an environment where we celebrate sharing information proactively and completely wherever possible and where we encourage full reporting of the good, the bad, and the ugly with a focus on where we go from here,” she added.
District 202 remains committed to transparency and public accountability. Financial information is available on the District website at https://www.psd202.org/. Board of Education committee meetings and regular board meetings are broadcast live and archived on the District’s YouTube channel.
Meeting agendas, reports, and supporting committee documents are also publicly available through the District’s online board portal at https://psd202.community.diligentoneplatform.com/portal/.