State Funding Formulas for Pupil Transportation. The state's statutory program of basic education includes transportation to and from school for eligible students, including transportation of students for special education services and between schools and learning centers.
To provide transportation allocations to school districts, the Office of the Superintendent of Public Instruction (OSPI) uses the Student Transportation Allocation Reporting System (STARS), which is a regression formula that uses prior year expenditures, student passenger counts, and district characteristics to calculate the expected costs of to and from transportation. The STARS formula result is then compared to the district's allowable transportation expenditures from the prior year. The school district receives the lesser of the two calculated amounts, plus any compensation adjustments provided in the operating budget.
Pupil Transportation Service Contracts. School districts may contract with private nongovernmental entities for pupil transportation services provided that the district engages in an open competitive process for the services at least once every five years.
School Employee Benefits. To provide health care and related benefits for all eligible public school employees and represented employees of educational service districts (ESDs), the Legislature created the nine-member School Employees' Benefits Board (SEBB). The program is administered by the Health Care Authority (HCA). Under the SEBB, collective bargaining for school employee health benefits is consolidated to a single agreement. State prototypical school funding formulas include funding for health benefits under the SEBB for state-funded staff units. The current Health Benefits Rate that applies to each SEBB-eligible school employee is $1,100 per employee per month in the 2023-24 school year.
For retirement, classified school employees are provided pension benefits through the School Employees' Retirement System (SERS), administered by the Department of Retirement Systems. For the 2023-24 school year, the employer contribution rate is 10.73 percent excluding administrative fees, and the employee contribution rate is 7.76 percent.
Contractor Benefits. A school district may only enter into, renew, or extend a pupil transportation services contract with a private nongovernmental entity if that entity provides the following to, or on behalf of, its employees who choose to opt in for coverage:
Employees are defined as in-state employees of the private nongovernmental entity working sufficient compensated hours performing services pursuant to the contract with the school district to meet the eligibility requirements for the SEBB program if the employees were directly employed by a school district.
All pupil transportation service contracts entered into or modified after the bill's effective date must include a detailed explanation of any contract cost increase by year, expenditure type, and amount, including any increases in cost that result from providing the required benefits.
For contracts that are entered into, renewed, or extended in the 2024 calendar year, the benefits must be provided to employees by the beginning of the 2025-26 school year.
State Reimbursement of Costs. Subject to amounts appropriated, OSPI must provide supplemental transportation allocations to reimburse school districts for increases in costs directly attributable to the new contractor benefit requirements. The reimbursement must be based on the total contract cost increase, less the portion of the increase not attributable to benefits required under the bill, less the increase in allocations based on the actual cost increase through the transportation funding formula.
Beginning September 1, 2024, school districts that contract for pupil transportation services must report:
OSPI may suspend these reporting requirements on or after September 1, 2027, for school districts that do not request supplemental transportation allocations.
The committee recommended a different version of the bill than what was heard. PRO: This is one of a few proposals in front of the Legislature as a way to account for the least predictable costs and bring stability to school districts. When SEBB was created it helped stabilize some of the school districts. This would give drivers parity with colleagues who are hired by school districts. Attracting and retaining qualified bus drivers is a challenge in certain areas, and bus drivers can't afford the plans currently available.
OTHER: There are concerns about the 2024 start date as it would mean finding a plan, changing to that plan, and getting the information out. It would be helpful to have another year to get that going. There are also worries that the supplemental allocation may not be available in three years when new contracts come up. The bill proposes to cover costs subject to appropriation and it would be better to have this funding guaranteed.
PRO: If you mandate that the costs get put on to contracts, they will flow down to school districts. We absolutely need this to be funded. The bus drivers for the Nine Mile Falls school district receive benefits. It will be financially devastating unless the Legislature fully funds this required benefit. The cost of health benefits rides heavy on the hearts of those employed by First Student. We still come up short to get the medical care we need to stay healthy. In Everett we have both school employees who get SEBB benefits and contracted bus drivers who do not.
OTHER: The House budget does not come close to paying for the cost of transportation. The amendment put on in the Education Committee that says the benefits would not be paid until the 2024-25 school year gives us time to do all the things we need to do to actually fund the plans.
PRO: Earl Johnson; Debbie Gath, IBT L38.