Privatizing school busing is a mistake

By AMY HANAUER

The city schools in Youngstown are considering reducing public control of school busing in the hope of cutting costs for a district currently in fiscal emergency. As a fierce advocate for strong public services, I understand the desire to spend the school system’s all-too-limited dollars wisely. It is for that reason that the drivers of this proposal should proceed with caution — despite the claims of privatization proponents, school bus privatization often ends up costing districts more than keeping the service in house. And giving up public control of public services often means deeper problems in the long run.

Recently, a number of U.S. cities have found privatization of transportation services to bring unpleasant surprises. Chicago, for instance, has determined that its 2008 decision to privatize parking meters will end up costing the city over $1 billion. Just this June, a crash between aging metro cars in Washington, D.C., killed nine passengers. According to the Wall Street Journal, the Washington transit authority had resisted retiring all of the problematic cars, as doing so before 2014 would have incurred fees from the private rail contractor.

About a decade ago, Policy Matters Ohio studied five years of reports from 611 Ohio school districts, to determine whether contracting districts spent less to transport students than districts that provide transportation themselves. What we found should give pause to proponents of public sector contracting.

Higher costs

Student transportation, whether measured in median cost per pupil or median cost per mile, was substantially more expensive in districts that contracted out the service to a private company than in school districts that kept the service in-house. Over the five-year period, districts that used primarily contractors to transport pupils paid an average of $442 per pupil per year, 41 percent more than districts that used no contractors, which averaged $312. When measured as cost-per-mile the difference was even greater. Costs in the districts that used primarily contractors averaged $3.50 per mile, 57 percent more than the $2.23 paid by districts that used no contractors. Given the cost differentials it is little wonder that at that time, less than three percent of the state’s school districts had opted to rely exclusively on a private firm for their services.

Of course, there may be reasons why districts that contract out their pupil transportation paid 57 percent more for this service. Some administrators may feel that contracting out their busing gives them freedom to focus on instructional services. Others may have calculated that the best way to update an aging bus fleet with a limited capital budget is to contract out. Differences in the age of the bus fleet and the way depreciation is calculated may also account for some part of the price difference.

But our study shows we shouldn’t just yield to simplistic arguments that equate contracting with cost-savings and efficiency. At a time when school budgets are being squeezed ever more tightly and taxpayers are demanding accountability for every penny, we should be wary of climbing aboard the privatization bandwagon, lest we be taken for ride.

X Amy Hanauer is executive director of Policy Matters Ohio, a non-partisan policy research institute dedicated to creating a more fair, prosperous and sustainable economy.