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Stretching New York’s Education Dollar: Improving Pupil Transportation Aid Formulas

December 12, 2012

Public education from preschool to grade 12 in New York is a $60 billion enterprise, accounting for one in three state and local tax dollars. Per pupil spending in New York is well above national norms – $18,825 per student per year compared to $10,292 nationally – and ranks second among states behind Connecticut. To find ways to improve the cost effectiveness of education services Governor Cuomo created the New NY Education Reform Commission, which is expected to submit preliminary recommendations any day now. The Commission has a broad mission that includes examining education funding, distribution and costs. One area that needs improvement is the administration and cost of pupil transportation.

School districts in New York spent $1,100 per pupil on average on transportation in 2010, more than any other state and 140 percent above the U.S. average of $459. Transportation spending by New York City is $1,033 per pupil, while spending in the rest of the state averages a higher $1,141 per pupil – fully 149 percent above the national average. The next highest spending state, New Jersey, spends $908 per pupil.

In New York poorly designed formulas to determine state transportation aid contribute to high total spending and high per pupil costs by aiding wealthy districts too generously and by failing to provide incentives for many districts to contain costs. Districts are allowed to select the most favorable among six funding formulas, undermining changes in aid distribution that would be more responsive to changes in enrollment, student need, and local ability to pay. In addition, cost-based reimbursement of 90 percent for many districts erodes their incentive to achieve greater efficiencies. Nearly one-third of the districts in the State - 188 of 676 districts - receive transportation aid at the maximum 90 percent reimbursement rate. The minimum aid ratio for the wealthiest districts is 6.5 percent. Sixty districts in New York receive the minimum. Fully 495 districts get more than half of their transportation costs reimbursed. 

By Elizabeth Lynam

Data provided by the New York State Education Department for school year 2012-13 school year.