Posted by Yolanda Smith, December 23, 2010
Many school kids love puzzles, and extra credit is in order for any who can solve a particularly tough one about the yellow buses that take more than 140,000 children to and from school each day. Currently, yellow bus service is one of the fastest growing parts of the overall Department of Education budget. And here is the puzzle: why are these costs rising even as their ridership falls?
Generally, state law sets the criteria for transportation to school of public and nonpublic school students. Eligibility basically rests on the distance students live from their schools, with variations depending upon grade level. New York City sets its own minimum distance requirements, which provide transportation for more students than the state requires. The state also requires school districts to transport students with disabilities or living in temporary housing.
This school year the city’s total school transportation costs are expected to exceed $1 billion. The biggest portion of this is the cost of contracting for the school buses, which grew from $772 million in 2005-2006 to $887 million in 2009-2010, an increase of $115 million. Over that five-year period, the cost of yellow buses for general education students jumped $86 million or 16 percent and for special education students $29 million or 15 percent.
But fewer kids rode the buses last year as compared with the 2005-2006 school year. The number of students riding the buses in 2005-2006 totaled 156,980. They included 96,384 general education students and 60,596 special education students. By last school year, the number of general education students riding yellow buses had fallen 12 percent and special education ridership fell 6 percent. (It’s worth noting that during this same period the number of kids using student MetroCards grew from 520,596 to 579,984, yet the city’s cost remained $45 million a year under the long standing agreement with the Metropolitan Transportation Authority.)
So what’s driving up costs even as ridership declines? One piece of the puzzle may be the contracts the education department has with the companies that supply the buses and personnel such as drivers and matrons. These contracts allow price increases for things like fuel to be passed on to the city. But the average price of fuel in New York grew by only 4 percent from 2006 through 2010, much less than the overall increase in yellow bus spending.
Limited competition may be another piece to the puzzle. A side-by-side comparison shows that fewer vendors are providing yellow bus services to the city’s public, private, and parochial schools in 2009-2010 than were in 2005-2006. Although the education department does not use competitive bidding to award yellow bus contracts, having fewer vendors to work with can weaken the city’s bargaining position.
The rising cost of insurance, which swelled from $15 million to $25 million over the last five years, also played a role. The additional $10 million was specifically for insuring buses carrying special education students and accounted for over one-third of the increased cost of busing these students. (In the current school year insurance costs are expected to decline by $1 million.)
Clearly, there are other pieces to solving this puzzle. The increasing emphasis on school choice may have played a role in pushing up the cost of busing as students attend schools farther away from their homes. It is also possible that school bus routes have become less efficient as the number of students riding the buses has declined. A few years ago the education department sought to improve route efficiency, an effort that left some kids literally standing on frozen street corners in January waiting for buses that never came. Public outcry led to the reversal of much of that initiative.
While we have no definitive answer to why school bus costs are rising even as ridership is falling, there’s one factor that makes this a little bit less pressing from the perspective of the city budget: transportation costs are partially reimbursed from state aid for education. At least for now, city dollars have been a declining share and are expected to represent only 38 percent of transportation funding while state aid is the main support for these expenditures and makes up the balance.
New York City residents, of course, also pay state taxes, so they end up paying coming and going.