Report 2006-109 Summary - March 2007

Home-to-School Transportation Program: The Funding Formula Should Be Modified to Be More Equitable

HIGHLIGHTS

Our review of the Home-to-School Transportation (Home-to-School) program administered by the Department of Education found that:

RESULTS IN BRIEF

Although state laws require school districts and county offices of education (school districts) to provide transportation services only to special education students with transportation needs specified in their individualized education programs, many school districts also provide such services to regular education students. According to Department of Education (Education) data, California's school districts provided transportation to more than 91,000 special education students (at a total cost of $438 million) and more than 830,000 regular education students (at a total cost of $777 million) during fiscal year 2004-05. To help offset some of the expenditures school districts incur in providing transportation, the Legislature created the Home-to-School Transportation (Home-to-School) program. State laws require Education to allocate the Home-to-School program funds to school districts based on the lesser of their prior year allocations or approved costs. The Legislature appropriated $487 million for the Home-to-School program for fiscal year 2004-05, and it appropriated $511 million for fiscal year 2005-06.

The current legally prescribed funding mechanism prevents some school districts that did not receive Home-to-School program funds in the immediately preceding fiscal year from receiving these funds because of the basis of allocation. For example, 80 school districts provided both special education and regular education transportation; however, they received Home-to-School program funds for only one program because they had received funding for only one program in the preceding fiscal year. In addition, although the annual budget act increases the Home-to-School program funds to account for the increases in the statewide average daily attendance, these increases are less than the student population growth some school districts have experienced over the years. Specifically, in addition to cost-of-living adjustments, the Legislature typically increases Home-to-School program funds to account for the increases in average daily attendance. All school districts receive the same rate of increase for their student population growth. However, some have experienced more accelerated growth rates than others. As a result, some school districts might provide transportation to more students than they did in the past and, therefore, incur higher transportation costs, but their allocations have not increased at the same rate.

The fiscal data that school districts provided to Education for fiscal year 2004-05 show that approximately $500 million of the $1.2 billion school districts spent on student transportation were financed by the Home-to-School program funds. The remaining $700 million came from other state or local sources. In comparison with rural school districts, urban school districts received less overall Home-to-School program payments per student transported ($559 versus $609) and paid for more overall costs per student transported from other state or local sources ($828 versus $298). On the other hand, all school districts typically incurred higher costs to transport a special education student, but such costs were higher in rural school districts ($5,315) than in urban school districts ($4,728).

Various factors caused the student transportation costs to vary even among similar school districts. For example, some school districts incurred higher costs for salaries and benefits or for equipment maintenance. Further, some school districts incurred large infrequent expenditures, such as the purchase of a new school bus, which inflated their total student transportation costs for the fiscal year we reviewed.

We found that staffing levels and student test scores bear no relationship to the amount of transportation expenditures the school districts paid per student from other state and local sources during fiscal year 2004-05. Staffing levels and student test scores did not change from one school district to another in the same manner and rate as the change in the expenditures they paid from other funding sources per student. However, most school districts had to use other funding sources to pay for some transportation costs, so they experienced varying levels of fiscal impact on other programs. Some school districts also received funding through two other state programs specifically intended to help with their student transportation costs. Some of these funds are now available to more school districts.

RECOMMENDATIONS

To determine the fiscal impact on school districts that do not receive the Home-to-School program funds, Education should:

To ensure that all school districts can participate and receive state funds for the Home-to-School program to help defray transportation costs, Education should seek legislation to revise the current laws to allow funding for all school districts that provide transportation services to regular education students, special education students, or both.

To ensure that school districts are funded equitably for the Home-to-School program, Education should seek legislation to revise the law to ensure that funding is flexible enough to account for changes that affect school districts' transportation programs, such as large increases in enrollment.

AGENCY COMMENTS

Education generally agrees with our recommendations and will take steps to address them.