5/22/12                                                                                                                                               

This article provides insights into how various costs in the Texas public education system are shifting from state-level funding obligations to local school district funding obligations.   A review of student transportation funding and expenditure patterns in this article illustrates how this dynamic is affecting many school districts.  Most everyone would agree that student transportation is an essential service delivery area that benefits students’ average daily attendance.  However, financial management challenges are forcing some school districts to consider a parent-paid fee type of arrangement for transportation services, as authorized by Senate Bill 1 enacted by the 82nd Legislature in 2011. 

State aid funding weights, adjustments and measures have not been updated in about two decades for the most part for special population instructional settings (instructional settings other than the regular education setting) and for certain public education-related services.  The current funding rates for school districts’ transportation funding rates were established in 1984 (the same year that formula weights were established that remain in effect for certain Foundation School Program special programs, including special education).
 
Add to this shifting funding dynamic the ongoing significant variances in per student funding in school districts with similar demographics and student enrollment levels.  These uncontrollable factors have served to significantly increase the complexity of many management decisions, as chief financial officers are challenged to budget sufficient resources for the composition of public education-related programs, services, and activities.

A few state-level student transportation school district statistics for school year 2010-2011 and fiscal year 2011:

Source: TASBOeFACTS+, Student Transportation Data and PEIMS Data reported to Texas Education Agency and TEA State Finance Data

Increasing Local Funding Obligation

 Let's begin with a review of state-level trends for annual state aid transportation allotments compared to total expenditures reported under Function Code 34, Student Transportation, for the General Fund.  As shown in the chart increases in total student transportation costs clearly outpaced marginal increases in the annual transportation allotment authorized in the  General Appropriations Bills enacted by the Legislative Sessions during the past decade.  The increasing gap between total costs and the transportation allotment illustrates the shifting revenue burden to fund daily student transportation services in local school districts.

Source: TASBOeFACTS+, Student Transportation Data reported to Texas Education Agency and TEA State Finance Data

Miles Driven

Let's give a context to the Texas student transportation system by reviewing the total mileage driven reported by local school districts to the Texas Education Agency.  The map helps illustrate the uneven pattern of total miles driven during the school year by school districts across Texas.  The relative sparse population density in rural Texas is one contributing factor to the varying levels of effort required to provide transportation services to enrolled students. 
 

Source: TASBOeFACTS+, Student Transportation Data reported to Texas Education Agency

Student Demographics

We will now give an additional context to the Texas student transportation system by comparing student demographics to participation levels in student transportation services.  Anecdotally we know that scale of the student transportation operations in some school districts increased significantly in recent years as a result in significant changes in the student population demographics.  The scatter graph (a few of the large enrollment school districts extending beyond the scale of the map are excluded in addition to school districts reporting zero miles) below clearly shows how family income levels are correlated to student transportation participation levels.
 

Source: TASBOeFACTS+, Student Transportation Data reported to Texas Education Agency and TEA PEIMS Data

Unfunded Transportation Costs

Next let's review the varying levels of unfunded transportation costs by Texas school districts for fiscal year 2011 (twelve-month period ended June 30, 2011 or August 31, 2011, depending upon the school districts’ fiscal year end).  As explained in the map below, unfunded transportation costs varying significantly in adjacent rural school districts.  Like the pattern for miles driven, the rural geography and dispersion of relatively small numbers of enrolled students is one factor contributing to the variances observed for various school districts. 
  

Source: TASBOeFACTS+, PEIMS Data from Texas Education Agency and TEA State Finance Data

Conclusion

School district chief financial officers are increasingly challenged to shift and rebalance financial, staff, and contracted services to sustain the public education enterprise.  The shifting cost burdens in this and other public education areas are a contributing factor to increases in local property tax rates and levies.  As the percentage of students from low income families continues to increase year-over-year, the quality of the composition of programs, services and activities must also improve to increase student engagement and attendance levels.  Student transportation costs trends relative to student transportation funding illustrate how overall revenue increases are required by many school districts. Public school financial management is inherently complex and even more so as various uncontrollable factors increasingly constrain scarce financial and staff resources.

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To read related Business News articles, click on the link below.

http://www.tasbo.org/resources/business-news-list/744-part-3-insights-on-how-funding-obligations-are-shifting-to-local-school-districts

http://www.tasbo.org/resources/business-news-list/743-part-2-insights-on-how-funding-obligations-are-shifting-to-local-school-districts