Should your school district charge students for transportation services? Ignoring the statutory and regulatory issues in some states, most recently demonstrated by the debate in Franklin Township, Ind., fees present a difficult philosophical and financial question to answer.
In theory, user fees are a well understood concept and used in a significant number of contexts outside of transportation. In virtually all instances, the fees are designed to promote the user of a service incurring the cost while minimizing or eliminating the cost impact to non-users. Seems simple enough, except that the relationship between transportation and education tends to muddy the waters.
Three specific and related questions arise when fees are discussed. The first question is cost. In order to use fees to recover the full cost of operating the bus, it is necessary to divide the expected annual cost by the expected annual riders. If we assume an $80,000 operating cost and a two-tier system, the minimum cost would be $556 per student ($80,000 divided by 144 students). Over a typical 180-day school year, the breakdown would be about $3.14 per student rider per day for both morning and afternoon routes.
Any higher costs or lower ridership will require the fee to be raised.
The inability to raise fees to the recover the full cost of service raises the second question: how much of the service should be subsidized by non-fee revenue? If the full cost recovery fee is likely to be too high to create sufficient demand, it will be necessary to subsidize the service with other funds. At some point the subsidy will impact both the cost and level of service that can be provided. If service is deemed inadequate for the price it will reduce demand and the whole cycle begins again.
The third question about fees is philosophical. Even if the fee can be determined to be economically optimal, will the use of fees negatively impact the ability of students to access educational resources? In addition, since this is likely to impact only non-special education additional questions of fairness and equity should be considered. I think the inevitable answer is yes, but the goal of the fee structure should be to minimize the negative impact of educational access.
The issue of fees will be an increasingly frequent part of the transportation discussion. Managers need to be prepared to address the financial and policy impact of fees. Assessing the rationale for fees, establishing a fee that balances demand and price, and clearly understanding the impact that fees have on access to education will be a key skill set for transportation managers.
Tim Ammon is a consultant with Management Partnership Services, Inc., in Rockville, Md. He has extensive experience in system implementation and use and evaluating school bus routes and schedules and has analyzed all aspects of transportation and fleet management operations. Ammon also assists in the specification and implementation of transportation software applications.
