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Economy & Business

Study Shows School Bus Privatization Too Costly

The key argument for privatization of any government-controlled operation is that it saves money. However, that argument may not hold much actual merit, at least when it comes to public school busing.

According to a new study released Tuesday by the Keystone Research Center, Pennsylvania school districts end up spending more tax dollars on transportation than districts that manage their own bus fleets.

According to the report, using contractors for busing grade school students on average costs $223,900 more than if the district controlled its own busing. If every school district in Pennsylvania "in-sourced" transportation services, the study claims taxpayers would save an estimated $78 million.

Study co-author Dr. Stephen Herzenberg believes school bus contracting to be a poor bargain.

"At a time when deep cuts to schools are driving up class sizes and limiting student opportunities, should we pay more to private companies to transport kids to school?" Herzenberg asked.

Across the nation, 4,000 different companies transport almost 25 million students to school each day. In Pennsylvania, 72 percent of school bus transportation was contracted out by school districts in 2008.

Contracting out to a private company does provide a district with a short-term infusion of money, said Herzenberg. This option is also alluring to many districts because the state provides higher reimbursement to districts that contract out bus services, essentially making in-house and contracted costs for districts the same, while transferring the cost to the state government.

Herzenberg says this transference of cost doesn't solve anything.

"Pennsylvania should make every tax dollar count instead of giving school districts incentives to adopt inefficient transportation systems," Herzenberg said. "We can change course now and use the savings to improve the quality of our children's education."

The Keystone Research Center is a nonprofit, nonpartisan research organization with the goal of promoting a more prosperous and equitable Pennsylvania economy.