April 25, 2012

Privatized school buses cost taxpayers more

Published April 2012 Voice

Did you ever hear the old adage, “If it sounds too good to be true, it probably is?”

In terms of contracting out services in public schools, no one knows that to be true better than PSEA. Subcontracting leads to substantial reductions in pay and benefits or the loss of jobs, and often sends taxpayer money to companies outside of local communities.

Now, a new study by the Keystone Research Center found that Pennsylvania school districts that contract with private bus operators end up spending more taxpayer dollars on transportation than those that manage their own bus fleets. 

In its study, “Runaway Spending: Private Contractors Increase the Cost of School Student Transportation Services in Pennsylvania,” Keystone found that contractors “low ball” prices during the bidding process. Once districts are locked in, they have no leverage over increased costs for services or bargaining during contract renewals.

The study noted that one-time lump sum payments that districts receive from the sale of their bus fleets greatly influences their decision to contract out. But once they sell, it is extremely difficult for districts to go back to managing their own transportation services because it is so expensive to purchase a fleet.

Total costs for all taxpayers add up to as much as $223,900 higher when a typical Pennsylvania school district goes from providing all bus services in-house to contracting with a private operator. If every school district in Pennsylvania in-sourced transportation services, taxpayers would save an estimated $78 million.

Researchers found that, because it more generously reimburses districts when they contract out, the state picks up essentially all of the cost increase with contracting out.

The researchers also identified 29 school districts that substantially increased their use of private carriers between 1992 and 2001. In the first year after privatization, total spending on student transportation increased by 10 percent or more in 20 out of the 29 districts.

In short, Keystone’s findings confirm what PSEA already knew — that privatized transportation at our public schools only looks good on paper.

Keystone recommends that rather than offering incentives for schools to employ transportation systems that are inefficient, the state should offer low-interest loans to help them purchase new school buses. Doing so would be a better use of taxpayer dollars.

PSEA could not agree more. After all, transporting children safely to and from school is an important part of what our students are guaranteed under the state constitution: “the maintenance and support of a thorough and efficient system of public education to serve the needs of the Commonwealth.’’ 



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