Letter State Budget

CBC Encourages Governor Cuomo to Veto Bill on School Bus Contracts in NYC

November 18, 2016

Dear Governor Cuomo,

I am writing on behalf of the Citizens Budget Commission to urge you to veto A8019C/S5984-C, a bill to impose costly restrictions on the procurement of school bus contracts in New York City. Pupil transportation is a $1.4 billion expense in New York City; the State pays for a majority of this expense through transportation-based school aid. In 2011 the Bloomberg Administration competitively bid school bus contracts for the first time since 1979. Opening the process to competition without costly provisions requiring the hiring or retaining of the most senior employees saved more than $400 million over five years.

This bill imposes two unnecessary and costly requirements on the City’s procurement process for pupil transportation. First, it restores preferences for the retention or hiring of the most costly employees. Second, it requires use of the Employment Cost Index (ECI), rather than the more slowly-growing Consumer Price Index (CPI), as the cap for adjusting costs when contracts are extended. Between the end of 2011 and 2015, growth in the ECI (8.1 percent) outpaced that of CPI (4.7 percent). In addition, the bill offsets the costs of these requirements by exempting school buses, parts, fuel, and other equipment from the sales tax—an unnecessary and unjustified tax break.

It is critical that the flexibility to negotiate contracts and to provide savings for future taxpayers is preserved.

This costly and ill-advised bill should be rejected.

Carol Kellermann