Call to fix or phase out school transportation
(Calif.) With the Legislature set to tackle a remake of California’s 67-year-old school transportation funding system, the Legislative Analyst on Tuesday offered up three options ranging from a complete phase-out of the program to covering an increased share of reimbursement costs for districts receiving less than the state average.
Two new bills, both aiming to increase the state’s share of transportation funding to districts, were introduced just last week in the Senate.
“The state’s existing approach for allocating [Home-to-School Transportation] funding is widely recognized as outdated and irrational,” Kenneth Kapphahn wrote in the LAO’s “Review of School Transportation in California."
“Districts’ funding levels are based on the amounts they received in the early 1980s, with no adjustments for current characteristics or levels of transportation service,” continued Kapphahn. “Moreover, because the funding formula is based on historical participation, a few school districts and all charter schools in the state are excluded from receiving HTST funding.”
Updating the HTST program, established in 1947, follows on the heels of Gov. Jerry Brown’s 2013 restructuring of the state’s much larger school funding program, which had grown complex and fragmented by a jumble of restricted pots of money.
While a long list of those categorical programs were swept into Brown’s new Local Control Funding Formula, transportation, along with a few other categorical programs, were kept separate until legislators could decide how they wanted to handle them.
The separate Senate bills would both raise state reimbursement rates for districts’ school transportation costs. Republican Sen. Andy Vidak’s legislation would fully reimburse districts for home-to-school transportation costs. Democratic Sen. Norma Torres proposes raising to 50 percent the reimbursement rate for any district under that mark.
Torres’ approach in some ways mirrors one of the LAO’s suggestions, which is to maintain the HTST program and create a new formula that would develop a set of allowable transportation expenditures and reimburse all districts for a set percentage of those costs.
“We believe this ‘share of cost’ approach is most viable if the state’s share is set between 35 percent and 50 percent. A lower level would benefit too few districts to merit establishing such a formula, whereas a higher level would erode incentives to run efficient programs,” Kapphahn wrote.
Current HTST allocations vary across districts but cover an average of 35 percent of transportation expenditures statewide, the LAO said. Covering this share of costs would provide additional funding to roughly one–third of districts, whereas covering 50 percent of costs would provide additional funding to more than half of all districts but also would carry additional costs – up to as much as $260 million more a year.
Adopting a new transportation formula would allow funding allocations to be updated annually, as well as provide a mechanism for previously excluded local educational agencies – including 1,100 charter schools serving more than 450,000 students – to receive transportation funding, the report states.
A second option put forward by the LAO is to pay for only ‘extraordinary’ transportation costs, to be determined using a base threshold for what the state considers higher-than-normal costs. The state would then fund a share of the costs in excess of that threshold.
The LAO’s third proposal is to fund transportation costs as part of the LCFF, meaning the state would no longer provide additional funding for student transportation. Under this scenario, the HTST program would be phased out by ensuring no district receives less money under LCFF than it does today. Districts would determine the level of service they would provide and pay transportation costs from their LCFF allocations.
This approach would, according to the LAO, free up the roughly $491 million the state currently budgets for home-to-school transportation and “the Legislature then could use these funds for any educational purpose, such as increases in LCFF base rates or special education funding to benefit all districts.”
The largest source of funding for pupil transportation, according to the LAO, is local unrestricted funds, which covered 62 percent – roughly $860 million – of transportation expenditures in 2011–12.
The next largest funding source supporting pupil transportation services is the state HTST categorical program, which in 2011–12 totaled $491 million, covering 35 percent of total expenditures.
While the program started by reimbursing districts for a share of their transportation expenditures, since the early 1980s districts have been “locked in” at the same funding levels with no adjustment for changes in costs, enrollment or any other factor apart from uniform cost–of–living adjustments in some years. Also, each district’s HTST allocation was reduced by 20 percent in 2008–09.
A total of 890 school districts receive HTST funding, along with 38 COEs, the LAO said in its report.