Brief Description: Changing student transportation funding.

Sponsors: Senate Committee on Ways & Means (originally sponsored by Senators Rockefeller, Parlette, Eide, Weinstein, Fairley, Keiser, Shin, Kohl-Welles, Murray, McAuliffe, Rasmussen, Kauffman, Kilmer, Franklin and Holmquist).

Hearing Date: 3/28/07

Staff: Ben Rarick (786-7349).

Background:

The state provides funding to school districts for pupil transportation using a funding method developed in the early 1980s. This method has not been significantly changed since its development. In the 2005-07 Operating Budget, the Legislature appropriated $500 million for pupil transportation. Seventy seven million dollars are earmarked for school bus purchases and replacements. The remaining $423 million is for the operations of transportation programs.

The Legislature's funding method is designed to fund the transportation of eligible students to and from school at 100 percent or as close thereto as reasonably possible. Certain types of transportation are not funded under the formula, such as transportation for athletic events, or other extracurricular programs not considered part of the basic education program.

The 2005-07 Operating Budget mandated that the Joint Legislative Audit & Review Committee review pupil transportation funding in Washington. The JLARC study found that there is a 95 percent probability that to/from pupil transportation expenditures exceeded state revenues by between $92,619,322 and $114,376,345 in the 2004-05 school year. The JLARC also found while most (187) pupil transportation programs received less state funding than their statistically expected costs, there were 76 programs that received more state funding than their statistically expected costs.

Regarding accounting methods, JLARC found that districts are not required to separate out "to/from" transportation costs from other transportation costs, and efforts to do so varied substantially from district to district. In terms of best practices, the study reviewed formulas from other States and identified several recognized best practices, but it did not make specific recommendations on a formula to be adopted. The JLARC emphasized that legislative priorities should dictate which funding method was most appropriate.

Summary of Bill:

The Office of Financial Management (OFM), in consultation with Office of Superintendent of Public Instruction (OSPI) and the Joint Legislative Audit and Review Committee (JLARC), will contract for the development of two options for a student transportation funding formula. The formula options must reflect actual costs and builds incentives for an efficient use of resources, and provide school districts with a formula for predictable levels of funding.

In developing the two options, OFM and the contractor will consult with the OSPI, regional transportation coordinators, and school district staff. The OFM will report to the education and fiscal committees of the Legislature with a detailed description of options and legislation that is required to implement options and any accompanying legislation to implement the funding methodology by December 1, 2008.

The OFM report on the new funding formula is required to include an evaluation of the feasibility of having some or the entire pupil transportation program supported by the transportation budget, including utilizing local transit agencies. Starting with the 2007-08 school year, school districts are required to account for "to and from" spending costs separately from other pupil transportation spending.

Appropriation: None.

Fiscal Note: Available.

Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.