North Carolina Reallocates $14M from School Bus Replacement Fund

June 30, 2020

Three separate bills were signed by North Carolina Gov. Roy Cooper in June to appropriate almost $14 million from the School Bus Replacement Fund to other educational entities during the COVID-19 crisis.

The School Bus Replacement Fund reportedly has just over $40 million in reserves, which the state uses to replace public school district buses that are 20 years old or have been driven 250,000 miles. The funds also aim to keep North Carolina school buses safer, and in 2015, the state started offering lap/shoulder seatbelts as a no-cost option on replacement buses.

But with many school buses parked for the past several months during school closures, state legislators took aim at repurposing replacement money.

H.B. 1071, a moderate partisan bill filed on May 12 and signed into law on June 19, reallocates funds to the state’s Department of Public Instruction (DPI) for increased average daily membership (ADM) in public schools during the 2020-2021 school year. The law states that by Aug. 15, DPI shall transfer over $3.9 million in nonrecurring funds from the School Bus Replacement Fund.

The legislative text states that the pandemic has devastated the economy in North Carolina, causing job loss and has disrupted the delivery of education by public schools. By providing supplemental funding for low-wealth counties on the basis of ADM, the bill suggests that the school bus funds are better used for responding to the educational impacts of COVID-19.

The text also states that $75 million is to be transferred from the Civil Penalty and Forfeiture Fund, and the State Controller shall transfer $22 million from the Coronavirus Relief Reserve to the Coronavirus Relief Fund, which will be allocated to fund ADM.

H.B. 472, a moderate partisan bill, filed on March 26, 2019 and signed into law on June 19, appropriates $2 million in school bus funds by Aug. 15 to North Carolina State University to provide a match for federal funds that support the development of manufacturing of biopharmaceutical products, agricultural research and cooperative extension program activities. Additionally, the new law moves another $3 million from the School Bus Replacement Fund to the North Carolina Agricultural and Technical State University for selling dairy products at university-owned facilities.

In addition, S.B. 814, a moderate partisan bill introduced on May 19 and signed by Cooper on June 26, appropriates funds to the NC Promise Tuition Plan. The legislative text states that by Aug. 15, $5 million in nonrecurring funds shall be transferred from the School Bus Replacement Fund to the University of North Carolina Board of Governors Institutional Programs.

The NC Promise Tuition Plan sets tuition at $500 per semester for North Carolina residents and $2,500 per semester for nonresidents at Elizabeth City State University, the University of North Carolina at Pembroke and Western Carolina University.

The act also transfers the sum of $10 million in nonrecurring funds from the cash balance in the Education Lottery Reserve Fund.

All bills go into effect on July 1.

There is no indication of whether or not the school bus replacement program will be refunded at a later date.

Editor’s Note: Multiple messages left by School Transportation News with the North Carolina Department of Public Instruction and school system transportation directors across the state seeking more information on the impact of these bills were not returned as of this writing.