Coatesville presents preliminary FY2025–26 budget and flags charter-school funding as a major cost driver

Lori Diefenderfer, the district director of finance, presented a preliminary update on the Coatesville Area School District's 2025–26 budget at a combined finance committee meeting, outlining revenue and expenditure projections, timeline milestones and a set of budget pressures that include rising personnel costs, special-education spending and charter-school tuition formulas.

Diefenderfer told the committee salaries and benefits are a major driver, projecting a roughly $3 million (about 4.02%) increase in salaries and benefits versus the prior year. She reported increases in purchase services (about $2.3 million), supplies (about $1.7 million) and property-related expenses (about $750,000) for an overall projected $7.9 million increase in expenditures (about 3.41%). Diefenderfer said projected total revenues were about $227 million under current assumptions, leaving an estimated gap of roughly $12.3 million that the district must address through expense reductions, revenue changes or use of fund balance.

On revenues the finance director said local revenue remains the district's largest source but noted an expected decrease in investment earnings of about $1.1 million this year. State revenues shown in the preliminary figures were modestly higher than last year (Diefenderfer cited an approximate 6.2% increase in state receipts in preliminary numbers, but cautioned final PDE figures are not yet posted). She reminded the committee that the district previously adopted budget parameters that cap the tax-rate increase at an adjusted (Act 1) maximum of 5.1%; Diefenderfer said the district's “starting point” is 0% and staff will work to minimize tax impacts while balancing the budget.

Board members and staff spent significant time on charter-school funding, which Diefenderfer and other staff said is a major driver of district expenditures. The district presentation showed how charter tuition is calculated: district total expenditures (after allowable deductions such as federal funds, special-education expenditures, transportation and debt service) are divided across an assumed statewide special-education percentage of 16% when calculating the amount the district must send for a charter‑enrolled student designated as special education. Committee discussion noted Coatesville’s actual special‑education percentage (about 24.7% in the data shown) is substantially higher than the 16% assumption used in the charter formula. A board member characterized the difference as a math problem that transfers roughly $13,000 more per special-education student when those students attend charter schools — a direct pressure on the district budget. Diefenderfer showed a worked example calculating per‑student special‑education funding under the 16% assumption versus using the district’s actual special‑education rate.

Committee members also discussed the net fiscal effect of charter students versus district students. Staff explained that some costs (transportation, debt service) remain on the district’s books even when students attend charter schools; transportation in particular has increased because longer routes and driver shortages lead to higher tier charges. The committee and board members said these mechanics — deductions and the special-education percentage assumption — make it difficult for taxpayers and community members to see the district's net charter-related cost and urged clearer public communication.

Diefenderfer outlined next steps: ongoing staffing and program reviews to reduce the gap, continued monitoring of state and federal funding decisions, and a budget schedule that includes a preliminary budget adoption and a special board meeting for final adoption by June 30. The finance committee voted to move the district's preliminary budget resolution and related items to the full board agenda for subsequent action.

Why it matters: The preliminary figures show the district faces a mid‑single‑digit percent increase in budget pressure and a multi‑million‑dollar shortfall that must be closed before final budget adoption. Charter-school funding rules and transportation costs were identified as recurring, structural budget drivers that can materially increase district spending and complicate short‑term balancing choices.

Ending: District staff said they will continue to refine numbers as PDE and other funding data are finalized, pursue expenditure reductions where feasible and return to finance and full board meetings with updated projections prior to the district's final budget vote.