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'Incredibly unfair' -- Bemidji School District at disadvantage with state formula for transportation

A Bemidji School District bus travels along Sunset Drive, east of Becida, on a Monday afternoon.

Unbeknown to many of its student passengers, every two minutes a tracking device inside the bus' radio reports the bus's speed, direction of travel and exact location back to school officials in Bemidji.

For the past decade, Bemidji School District officials have made efforts to use advanced mapping and routing technology in order to find the most efficient bus routes possible, as a way to cut expenses.

This is important, they say, because the school district can't afford to waste time or money, as the state's current transportation funding formula does not fully reimburse the school district's costs.

Since Chris Leinen, the district's director of business services, began his job in 2000, he has seen school officials from Bemidji go to the state Legislature multiple times asking lawmakers to change the transportation funding formula.

To Leinen, there are winners and losers in the transportation funding game. Because the state gives transportation money to school districts for every student in the school district, whether they ride the bus or not, he said the winners are often districts with lots of students and few miles to bus.

"We've been harping on this for a long time," he said. "We've been getting people's attention, but we haven't been seeing any change."

The Bemidji School District is roughly 825 square miles. More than 5,000 students ride the bus each year. The cost of busing each student is roughly $555, according to Leinen.

Buses travel as far north as Red Lake, east to Cass Lake, west to Solway and south to Becida.

Providing busing to students in the district is mandated by the state. In Bemidji, however, the school district must not only bus its own students, but must also transport all nonpublic and public charter school students.

Like an onion, the school district receives reimbursement from the state in layers.

As a base amount, the state provides the Bemidji School District $248 dollars per pupil, whether they ride the bus or not.

Because the state recognizes the school district has more miles to bus with fewer students living in some of the farther away areas, it gives the school district sparcity funding, or an additional amount of money. In the 2009-10 school year, the school district received $740,163. This amount can vary year-to-year. In 2010-11, the district received $746,000.

The state also gives the school district money for providing transportation to charter school students. In 2009-10, this amount was roughly $186,700.

In all, the school district received roughly $2.3 million in transportation revenue for 2009-10. But it cost the district $2.8 million to transport students, putting the district roughly $575,000 in the red.

To fill the deficit, the district took money from its general fund, which it normally uses for classroom materials and staffing.

Because state transportation funding is rolled into school districts' general funds, districts with unused transportation revenue can fill holes in other areas of its budget.

Leinen said there is no connection between the dollars being spent by the state and the service it wants, which is transporting students.

"(The state) is giving out money to schools and saying 'We want you to transport kids. Now, if you happen to have some left over, that's fine. If you happen to be short, that's too bad,'" he said.

Leinen used two examples to prove his point:

In 2009-10, Richfield School District, which covers 8 square miles in suburban Twin Cities, buses drove 165,000 miles, roughly 680,000 fewer miles than Bemidji. Yet, Richfield was given nearly the same base amount in state transportation revenue as Bemidji and saw a surplus of $566,000.

Grand Rapids School District is twice as big as Bemidji, but its buses drove 200,000 fewer miles than Bemidji in 2009-10. Yet, Grand Rapids received roughly $326,000 more in sparcity revenue and saw a transportation revenue surplus of $475,683.

Not keeping pace

The state has given more sparcity aid to the Bemidji School District over the past year, which Leinen said has helped, but added lawmakers have not kept pace with inflation.

"The price of gas and buses has gone up faster than the stagnant funding from the state," he said. "This shortfall has gotten bigger. It hasn't gotten smaller."

What frustrates Leinen the most, he said, is state education officials collect information on school district expenses but still do not fully reimburse school districts with a deficit in transportation costs.

In a perfect world, he said, all funding would be based on the actual cost of the service provided. He wants to see all school districts be given as much money from the state as it costs to transport students.

"We're hammered on a regular basis for accountability," he said. "Here's the state throwing money out there with no accountability."

Leinen said he is not convinced change is in the near forecast.

But this winter, Bemidji area lawmakers learned more about the discrepancy when leaders from the three public charter schools in Bemidji met with school district officials to discuss common legislative priorities among K-12 public schools.

All four of the school districts agreed changing the state transportation funding formula was necessary.

Two years ago, the issue was also a top priority for the Minnesota Rural Education Association. But now the organization's top priority is changing the entire K-12 funding formula, Executive Director Fred Nolan said.

The shift comes after a report by the Minnesota Department of Education titled "Funding Education for the Future" came out.

The report spells out recommendations by the Education Finance Working Group, which has improving the adequacy, equity and stability of pre K-12 education funding as a major recommendation.

Fixing the transportation funding formula, Nolan said, is not specifically cited in this overall funding priority, but said it would help out all school districts regardless of what their cost issues are, whether it be special education, enrollment or transportation costs.

'A fresh look'

Sen. John Carlson, R-Bemidji, called the transportation formula "incredibly unfair," but added given the difficult economic climate and the state budget, he wants Minnesota to address the entire school funding formula.

"Isn't it time we take a fresh look?" he asked hypothetically. "What do we need to adequately fund schools? How can we make it fair from urban to rural? If we can reach a consensus, that's the way it should be approached."

He said he is thankful constituents from Bemidji continue to come down the state capitol and talk about the need to change the funding formula.

"We really need to see Bemidji folks coming down and hammering that issue," he added.

Rep. John Hancock, R-Bemidji, said he supports more equality greater Minnesota and the metro area.

As a cost-cutting solution, he suggested school districts limit transportation to within the school district. While a supporter of open enrollment, which the Bemidji School District has, Hancock said there needs to be more parental responsibility with getting students to the school district boundary to be bused.

Greg Liedl, the school district's director of transportation, said years ago parents would drop off and pick up their children at the district line, but this proved to be unsafe.

More than 50 cars would park along an intersection along state Highway 89, just south of the Red Lake Reservation line, and students would unload and load the bus along a busy stretch of road. Now, the school district picks up students at the elementary school in Red Lake.

"We moved three miles into the Red Lake reservation because of safety," he said.

Safety is also the reason why the district also picks up students in Nebish and at a gas station in Cass Lake, both of which are outside school district boundary lines.

Rep. John Persell, DFL-Bemidji, said he has been a longtime supporter of changing the state transportation funding formula, but he doesn't expect anything to happen with it in this upcoming bonding session, which starts Jan. 24.

"It gets hung up in the fact that if we get more money for the Bemidji School District, who's losing? No one is putting any more money in the pot," he said.

Persell said he would support putting more money into the overall K-12 funding formula.

"I think every school should have equal opportunity and funding for students," he said. "If we had the DFL in the majority it would have a much better chance of getting talked about. I think we'll see it in 2013."

The wrong way

In September 2010, a Minnesota 2020 education fellow named John Fitzgerald published a report on Minnesota transportation disparities called "The Wrong Way: Minnesota School Transportation Disparities."

In the report, he listed Bemidji School District as one of 10 school districts in 2008-09 with the biggest funding disadvantages.

He stated the schools on the list tend to be rural or exurban districts that cover many square miles, making it impossible to expand the radius of service around schools to cut costs.

Also included in the report was a list of school districts with the highest amount of extra transportation funding in 2008-09, including St. Paul with a surplus of $7.3 million and Duluth with $1.2 million surplus.

Liedl said he has been to St. Paul to talk to legislators about the transportation funding disparity. He said he wants the state to cover the school district's actual cost of transportation.

"I dip into the general fund a half a million bucks that I take out of the classroom to make up the difference in my budget to pay for the drivers and the fuel to do what we do," he said. "The formula is skewed."