House Bill 259 offers more cost-effective alternative than existing system

School transportation costs

Posted: Monday, April 28, 2003

For many years, the state of Alaska fully funded pupil transportation costs by reimbursing school districts for 100 percent of the costs. But the reimbursement program has many flaws. The program lacks incentives for local school officials to keep costs to a minimum because, under its current structure, the state reimburses all transportation costs. It is a "cost-plus" program.

Pupil transportation costs have skyrocketed from $25 million to $58 million, a total increase of 136 percent from 1990 to 2004. This growth far exceeds the combination of increased enrollment and inflation.

Under the current program, school districts typically solicit five-year contracts with automatic annual inflation adjustments. The costs associated with the contract and future inflation costs are passed on to the state.

Further, the program authorizes funding of additional bus routes or emergency bus routes for students who live one-and-a-half miles from school.

Emergency routes take into consideration traffic patterns, harsh weather and winter darkness. These conditions vary widely around the state and each carries a different price tag.

Two other examples of uncontrollable costs are dual systems in which the school district operates its own buses and contracts for others, and the practice of transferring nonreimbursable costs to the reimbursable side of the ledger.

House Bill 259 offers a more responsible alternative to the current system. This legislation will realign the current structure and control the operating costs of busing students.

The proposed structure will provide funding for each district at a flat rate and empower the district to make a policy call at the local level by tying the dollars directly to the decisions made by the local school board.

Finally, HB 259 serves as the catalyst for maximizing efficiencies for local school bus programs and to provide parents with measures by which local school officials can be held accountable.

The proposed changes under HB 259 repeal the reimbursement program and create a new grant program. Each district receives funding run through a formula based upon the total enrollment of each school district.

The pupil transportation allocation of each district is determined by dividing the total cost of state-provided school transportation during the 2002-2003 school year, by the district's total student enrollment.

For example, the state will reimburse Juneau about $2 million for transportation costs incurred in FY2003. Currently, 5,463 students are enrolled in Juneau schools. Therefore, $2 million would be divided by 5,463 students. This equals $366 per student as the district's pupil transportation allocation.

HB 259 offers a school district potentially more funding for pupil transportation. As the total student population increases, the district's allocation increases. The new formula even accounts for students who do not utilize the bus service, which would offset inflation. Moreover, there is enough room in the program to provide bus service to private school students on public bus routes.

The proposed system enables each district to redirect the savings gained by achieving efficiencies in its school transportation service to classroom instruction.

HB 259 removes the state's power to mandate rules and regulations with which districts must comply to qualify for reimbursement. School district officials working cooperatively with their school boards and community members are in a better position to make decisions on how best to serve the transportation needs of the district.

The structure proposed by HB 259 will reduce government involvement, shift the authority from the state to local districts, provide a system of accountability for parents, maximize efficiencies in transportation services and foster a cooperative community relationship, while in the end attaining the most important goal transporting students to the classroom.

I look forward to the debate in the Legislature.

Jim Clark is chief of staff for Gov. Frank H. Murkowski.

On Tuesday: A response from Laidlaw Education Services which provides student transportation on the Kenai Peninsula.

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