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Bemidji School District, which serves an area of 825 square miles, transports students to and from not only the high school, middle school and its six elementary schools, but also all nonpublic schools and charter schools in the Bemidji area. Bemidji School District officials said rural school districts like Bemidji get shortchanged by the state due to an inadequate state funding formula. Pioneer Photo/Monte Draper

Driving in the red: Bemidji School District calls Transportation funding formula 'unfair'

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Two months ago, a Minnesota 2020 education fellow named John Fitzgerald contacted Bemidji School District's business manager Chris Leinen. He wanted to know more about money, specifically transportation costs.

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"I said to him, 'Here's the dirty little secret,'" Leinen said.

Fitzgerald's recently published report titled, "The Wrong Way: Minnesota School Transportation Disparities," catapulted into the limelight what Leinen said he has been trying to tell state lawmakers for the past two years: that rural schools get shortchanged due to an inadequate state funding formula.

School districts are required by law to provide transportation to and from schools for all public, charter and nonpublic students who live more than one or two miles from school, depending on grade level. In some cases, the district also is required to provide transportation for disabled children and open-enrollment students.

The state gives money to school districts for bussing by method of Adjusted Marginal Cost Pupil Units, or AMCPU.

According to a 2005 report titled, "Finance History," by Tom Melcher, beginning in 1997 the Legislature changed how it funded student transportation. Prior to fiscal year 1997, school districts received dedicated funding for student transportation. Starting with the 1996-97 school year, most transportation funding was rolled into school districts' general education revenues.

Consequently, districts have greater control of where they use these funds.

The state gives Bemidji School District $249 per student enrolled in the district, according to Leinen. While it seems the district would see a surplus from students who do not ride the bus, the cost of bussing between 1.1 million to 1.2 million miles a year exceeds the amount the district is funded based on student enrollment.

"The real problem is the state is paying a school district for every kid in that school, whether they ride the bus or not," Leinen said. "If you have a higher percentage of kids who ride, you get the same revenue but higher costs because you have more kids riding."

Bemidji School District, which serves 825 square miles, transports students to and from not only the high school, middle school and its six elementary schools, but also all nonpublic schools and charter schools in the Bemidji area.

Bemidji School District transportation coordinator Greg Liedl said that years ago, the district used to accommodate transportation to open-enrolled students by meeting students at the nearest existing Bemidji School District bus route within the district boundaries. Students living in Red Lake would be picked up along U.S. Highway 89, south of Red Lake.

"There would be 78 cars parked along the highway and loading kids on busses on the side of the highway was unsafe," Liedl said.

Now busses travel the extra miles to Red Lake Elementary School to pick up students because it is safer. Busses also drive as far as Cass Lake, Tenstrike and Nebish.

"We're a district that uses transportation widely," said Superintendent James Hess. "We have over 5,000 kids who ride the bus. There are some districts in larger cities where families have other choices. In Bemidji, because we are in such a huge geographical area, it makes sense for families to have kids ride the bus."

Fitzgerald's study stated the state fund allocated to the district for transportation in 2008-09 was $2.24 million.The cost of providing transportation that year was $2.88 million, meaning the cost of transportation was 22 percent higher than the funds given to it by the state.

In comparison, Fitzgerald stated that St. Paul Public School District experienced a $7.4 million budget surplus in transportation funds in 2008-09. Spokespeople from the St. Paul School District did not return a phone call seeking comment.

For school districts that pay more than are funded by the state for transportation, Leinen said, money gets pulled from the classroom.

"When you have to take money, you don't take lights or heat. You take people," Leinen said. "If you have fewer people, you have larger class sizes. This cross-subsidy is causing higher class sizes in Bemidji."

School districts that reside in cities with other means of transportation available often result in lower bus ridership levels for students. For example, students in St. Paul may choose to walk, drive a car, get dropped off by a parent or ride the city bus to school, rather than ride the school bus.

"School districts in the metro area drive no further than 4 miles away from any school," Liedl said. "That's one-sixth the mileage we do, yet they receive the same amount of money."

However, as Fitzgerald's report points out, urban districts' higher population density requires more buses, maintenance and drivers. Safety is a problem when picking up or dropping off students along busy streets.

But even so, Leinen believes the state's formula is inadequate.

"The funding formula has no real relationship to your costs. It's based on who attends," Leinen said. "If you happen to be a small, densely populated school where lots of kids walk, own their own cars or are using other means of transportation, you don't have many expenses for transporting kids. But you get the revenue."

The state devised a transportation sparsity index to compensate districts for distance and fuel costs in an effort to balance funding for rural districts, but many urban districts also qualify for these funds.

Richfield School District, a suburb of Minneapolis, receives sparsity money from the state.

"They receive it because a section of the airport falls in their district," Liedl said. "It's an unpopulated area, but they receive an extra $1,000 a year. It's not a lot, but why do they get sparsity money at all? Nobody busses there."

Some rural schools, like Blackduck School District and Clearbrook-Gonvick Schools, have chosen to save money with a four-day school week. Bemidji School District has no immediate plans to implement this option.

According to Blackduck Superintendent Bob Doetsch, Blackduck has saved more than $50,000 in transportation costs. The district cut back on the number of bus drivers, routes, fuel and the "wear and tear" on buses.

"We have extra money now and small class sizes," Doetsch said. "Our total savings for going down to a four-day week is little over $130,000. It was a good thing. The (state transportation funding) is a band-aid for us."Other school districts have tried to remedy the transportation funding formula shortfall by increasing the walk zone, the distance set by school districts that determine which students are close enough to walk to school instead of ride the bus. But this negatively affects students' safety, Leinen said.

"If they make a cut to transportation by increasing the walk zone, it cuts your cost in transportation, but reduces safety," he said. "Instead of being on a bus, which is by far the safest means of transportation, now students are walking, riding bikes or are in cars, which are significantly less safe.

"The tragedy is that there aren't more directives in how the money should be spent."

Leinen said the funding formula needs to be more closely tied to the service provided. For example, school districts should be given dollars based on the number of kids transported. If expenses are to be reimbursed, it should be based on the number of miles driven.

Lee Warne, executive director of the Minnesota Rural Education Association said MNREA is in the process of establishing its legislative initiatives. Changing the state funding formula for transportation compensation is one of its top issues.

"I don't know if this will change in the next legislative session," Warne said. "Changing the state funding formula for transportation is one of the issues we're looking into."

Hess said changing the funding formula has been one of the district's top legislative issues for the past five years. In the past the district has worked with area legislators, including state Rep. John Persell, DFL-Bemidji, the Minnesota School Board Association and the MNREA in trying to change the formula.

"We continue to raise the issue," Hess said. "We hope that some people would take notice, however, you have to look at the political realities. The most votes in the legislators are in the districts that generally have a surplus of cash at the end of the year."

For more information about the state transportation formula, visit the Minnesota Department of Education website at http://education.state.mn.us/MDE/Accountability_Programs/Program_Finance....

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