Coatesville Area SD projects $11.9 million budget gap for 2025–26; staff leaning to 3.5% tax increase

Laurie Dieffenreffer, the district's director of business administration, told the finance committee on May 20 that preliminary 2025'26 expense projections total about $242 million and preliminary revenue projections total about $230.1 million, leaving an estimated budget gap of $11.9 million.

Dieffenreffer said the single largest expense growth is salaries and benefits, which she estimated will increase by roughly $5.1 million as a result of collective bargaining settlements, healthcare cost increases, new positions and full absorption of positions previously partially funded by external sources. Purchase-of-service costs were projected to rise by about $9.3 million, including an estimated $4.7 million increase for charter-school tuition and roughly $2 million for transportation contract escalations and additional contracted services. Special-education services, technology and other departmental cost increases also contributed.

The district's preliminary revenue picture shows roughly $150 million in local revenue (before any tax action), about $75.6 million in state revenue and roughly $4.4 million in federal revenue. Dieffenreffer said the state figure includes roughly $4.8 million more in the Ready-to-Learn/Foundation block grant and about $1.1 million in special-education aid based on current-year receipts; she said team members added a conservative $1.7 million estimate tied to the governor's proposed budget but cautioned that the district must adopt a budget before the final state or federal budgets are settled.

Why it matters: the projected gap requires the district to identify reductions, consider use of fund balance and weigh potential tax-rate changes before submitting a final budget. Dieffenreffer said the district wants to avoid depleting the fund balance in a way that could repeat past negative-balance circumstances and noted the importance of preserving reserve levels to protect the district's bond rating.

Options and current leanings: Dieffenreffer outlined revenue impacts under several levy scenarios. With no tax increase, local revenue growth from reassessment is projected at about $743,000. A 2.5% tax increase would yield about $4.0 million, a 3.5% increase about $5.3 million, and an Adjusted Act 1 index (5.1% for this district) would produce about $7.4 million. She said staff are currently leaning toward recommending a 3.5% range but will keep reviewing departmental budgets and potential cuts before making a final recommendation.

Committee and board discussion: committee members asked about the range of state and federal funding outcomes. Dieffenreffer and Dr. Rybarczyk summarized uncertainty at both levels, saying federal Title funds may see small reductions in areas such as Title II and IV while Title I appeared likely to remain near current distributions; state allocations could be affected if the commonwealth must backfill federal cuts to human services. Committee members also pressed for clarity on fund-balance strategy; administrators described considering a split approach similar to last year (roughly a 50/50 split between using reserves and raising local revenue) while they continue to seek departmental reductions and efficiencies.

Next steps: staff said they will meet with departments to identify potential reductions, provide another budget update at the end of the month and present a final budget for adoption at a special board meeting on June 10.

Provenance: This article is based on the finance committee budget presentation beginning with the district's opening remarks on the 2025'26 preliminary expense and revenue projections and the committee Q&A recorded in the finance-committee transcript on May 20, 2025 (presentation start and budget-gap discussion).