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.
The 2023 Operating Budget appropriated $13 million for fiscal year 2024 and $13 million for fiscal year 2025 for OSPI to provide transportation safety net funding to school districts with a demonstrated need for additional transportation funding for special passengers.
Federal Requirements for Homeless and Foster Student Transportation. Federal laws include requirements for student transportation of homeless students and students in foster care, including transportation to and from a student's school of origin upon request and when it is in the child's best interest.
The federal McKinney-Vento Homeless Education Assistance Act (McKinney-Vento Act) defines homeless children and youths to mean individuals who lack a fixed, regular, and adequate nighttime residence. Under the McKinney-Vento Act, homeless children are entitled to receive transportation comparable to what is available to non-homeless students.
The federal Every Student Succeeds Act includes requirements for school districts to develop procedures that address how transportation to the schools of origin for children in foster care will be provided, arranged, and funded. In cases where a student is living outside the school district where a school of origin is located, multiple school districts and child welfare agencies may coordinate in determining a method of transportation and arrangements to share costs.
Transportation Alternate Funding Grant Program. The Transportation Alternate Funding Grant Program provides grant awards to school districts in addition to the STARS formula allocation. As part of the award process for the grants, OSPI must review school districts' efficiency ratings, key performance indicators, and other characteristics, such as unique geographic constraints, low enrollment, geographic density of students, the percentage of students served under the McKinney-Vento Act from outside the district, or whether a district is a non-high school district.
Student Transportation Allocation Formula. Formula Factors. The transportation allocation formula used by OSPI must be adjusted to include two factors?basic and special education passenger counts, defined by OSPI, and total sum of miles driven. Two of the factors used in the prior formula, average distance to school and number of locations served, are removed.
Formula Multipliers. The transportation allocation amounts generated under the formula must be adjusted by the following multipliers for qualifying school districts, as determined by OSPI:
Repeal of Prior Distribution Formula. Language referencing the development, revision, adjustment, and phase-in of the prior distribution formula is repealed. Language requiring school districts receive the lesser of the STARS formula result or the district's allowable transportation expenditures from the prior year is also repealed.
Distinct Passenger Categories. Beginning in the 2025-26 school year, the Superintendent of Public Instruction must reimburse school districts on a quarterly basis for 100 percent of the allowable transportation expenditures attributable to serving students in distinct passenger categories. These reimbursed services must be excluded when calculating the general transportation allocation under the formula.
Distinct passenger categories include:
Rules established by the Superintendent of Public Instruction must define allowable transportation expenditures for distinct passenger categories to include, at a minimum, student transportation via district bus, third-party bus providers, district-owned vehicles, and other vehicles operated by third-party providers when determined to be the most appropriate or cost-effective mode of transportation for a student in a distinct passenger category.
School districts must submit claims for reimbursement quarterly on a schedule determined by the Superintendent of Public Instruction consistent with the methods used to reimburse school districts for costs in other reimbursement-based categorical programs.
School districts must report allowable transportation expenditures for students in the distinct passenger categories on a quarterly basis. Data submitted in the prior school year must be used to determine the current school year reimbursement, adjusted for inflation. The Superintendent of Public Instruction must adopt accounting and reporting rules necessary to implement these new requirements, and may streamline reporting requirements for small school districts to account for their unique needs.
The Department of Children, Youth, and Families is no longer required to reimburse school districts for half of all excess transportation costs for students under their care.
Hold Harmless. Beginning in the 2024-25 school year and each year thereafter until 2027-28, no school district may receive a student transportation allocation less than its total student transportation allocation as calculated during the 2022-23 school year as adjusted for inflation. If a school district's transportation expenditures exceeded its transportation allocations in the 2022-23 school year, causing a negative funding differential, and the school district is receiving hold harmless funding, OSPI must provide additional transportation allocations that reduce the negative funding differential by 0.5 percent for each school year the school district qualifies for hold harmless funding. OSPI must recalculate a school district's funding differential annually using updated transportation allocations and expenditures from the prior school year and adjust amounts for inflation.
Audit. Beginning in the 2025-26 school year and each year thereafter, the state auditor must conduct a review of a school district's transportation expenditures to ensure they are necessary and reasonable if the school district's transportation expenditures exceed 110 percent of the average per-student expenditure amount in similar school districts. The review must be included in the state auditor's regular audits of the school district. OSPI must adopt rules to categorize similar school districts and notify the state auditor when a review is required.
Superintendent of Public Instruction. The Superintendent of Public Instruction must identify and collect necessary data in order to update the transportation model in subsequent biennia, and to identify district transportation allocation outliers.
By June 1, 2027, the Office of the Superintendent of Public Instruction must provide an analysis of school district transportation costs and allocations following the 2025-26 school year to the education and fiscal committees of the Legislature. This analysis must include the mileage, ridership, and costs for each district, disaggregated by each distinct passenger category and all other transported students. The Legislature intends to use this data to inform future discussions on revising the overall student transportation allocation model to a more transparent and predictable funding model.
Transportation Alternate Funding Grant Program. The Transportation Alternate Funding Grant Program is repealed.
Contractor Benefits. Any pupil transportation services contract entered into, renewed, or extended after September 1, 2024, must require the contractor to provide employee benefits comparable to the School Employees Benefits Board Program (SEBB) and School Employees Retirement System (SERS). Such contracts must also include:
"Employees of the contractor" are defined as employees working sufficient compensated hours for the contracting employer performing services on 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.
Subject to the availability of amounts appropriated for this purpose, OSPI must provide a one-time supplemental transportation allocation to school districts that experience an increase in costs to pupil transportation services contracts due to the new benefit requirements. To be eligible for the supplemental allocations, a school district must report to OSPI regarding the number of contracted employees that worked at least 630 hours performing contract services in the school year prior to entering a contract with the new benefits. Supplemental allocations may only be used as payments under pupil transportation services contracts for employee compensation and may not exceed $200 per contracted employee per month.
PRO: It is the state's responsibility to fully fund basic education, which includes student transportation. The current formula is not predictable and the lack of transparency makes it hard to plan year-to-year. The regression model was never fully funded and districts use local levies to make up the difference. Some districts have not been providing transportation to skill centers because they cannot afford to do so. Many students that want to attend skill centers are unable to do so unless they provide their own transportation. The bill provides for special populations: foster students will have the security of attending the district they have historically attended; homeless students that do not have a consistent residence can still get to school; fragile students who can't ride the bus can be transported as safely; and students can get to skill center facilities. The bill also accounts for the fact that urban districts struggle with traffic and rural districts struggle with large land areas and geographic characteristics that inhibit efficiencies. Providing benefits for bus drivers will benefit drivers and students, as well as helping recruit drivers in small labor pools.
OTHER: Requiring contractor benefits will be financially devastating if not fully funded. The language pertaining to bus driver benefits needs to be narrowed so that it doesn't unintentionally apply to other transit employees that may be providing transportation to students (metro, public transit, taxis, etc.). The language pertaining to additional district reporting requirements must not be overly burdensome for school districts.