While states like California and New York are passing electric vehicle mandates, which require all school buses on the road must be powered by electric batteries by a certain model-year, Michigan is enlisting the help of voters to approve the necessary funds to electrify school district bus fleets.
Howard “Mac” Dashney, the principal associate at Pupil Transportation Operation and Management Institute in Lansing, Michigan, said the sinking fund authority first approved by the state legislature in 1976 allows taxpayers to vote up to three mills—one mill is equal to $1 for every $1,000 of taxable amount—for a period of up to 10 years to provide funding independent of the school aid foundation funds.
“So, if your house has a taxable value of $100,000 and the district levies one mill, then you will pay $100 in annually,” he added.
Dashney said the purpose of a sinking fund is to pay for necessary capital and security expenses without taking money from the classroom. Starting in 2017, he said the sinking fund first allowed districts to either construct or repair school buildings, then implement security systems, then acquire or upgrade technology.
HB 5721, sponsored by Rep. Christine Morse, and SB 859, sponsored by Sen. Mallory McMorrow, seek to allow sinking funds to purchase of electric school buses. School bus purchases of any kind have never before been an allowable expense under the sinking fund.
“It’s not an easy bill,” Dashney explained, noting that Democrat-sponsored legislation perhaps could also include the purchase of any school bus, regardless of the fuel used.
Both bills have yet to move forward in their respective chambers since being introduced earlier this year.
Putting the Power in Voters’ Hands
For electric school buses, Dashney noted that allowing community members to vote on allocating funds makes the decision to implement more unanimous. He observed that government mandates can sometimes result in school district leaders feeling pressure to adopt a certain technology, whereas more buy-in can result from a voter-approved bond measure.
“We’re going to ask every citizen in Michigan, ‘Do you want to do this?’” Dashney shared, adding that he’s been working on adding school buses to the sinking fund since 2007. “What will happen is [community members] will see the people around them and they’ll hear from parents over the fence in the other district on how healthy the vehicles are.
“If Michigan has a model, it would be everybody has a choice,” he continued. “That’s the good news. And that’s the bad news. It’s the tougher way. It takes longer, but when it happens, everybody is in.”
Michigan’s sinking fund allows community members to vote on how they want to spend their money. Dashney explained that Michigan doesn’t have a separate capital expense fund for schools, and instead they receive a foundation allowance, or a big block grant.
“They get a bunch of money and can do anything they want with it,” he said. “That got to be kind of a problem because people would take money out of the classroom, to do capital expenses, or to do special kinds of things,” he said.
And the purpose of the fund is to reduce the cost because districts can pay for those things with cash. “A district does not have to rely on bond funding, with fluctuating interest rates, to support needed capital equipment and our construction purchases,” he added.
“And if we’re taking money out of the classroom to get kids to the classroom, that doesn’t seem to make a whole lot of sense,” he continued, noting that adding school buses to the sinking fund will reduce the cost of a bus by 5 to 10 percent because districts can pay with cash. “If the districts that have sinking funds get together and buy multiple buses, well then that reduces our costs per unit even more. So, that’s a big plus.”
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He said that adding school buses to the sinking fund is a strategic move going forward because at least the $5 billion Clean School Bus Program will run out after 2026. “Michigan’s school bus fleet rests almost solely on the shoulders of sinking fund taxing authority,” he said. “Because it makes it cheaper to raise capital to purchase school buses. It will allow a district’s taxpayers to come together and say we’re going to buy buses.
Dashney commented the allowing electric school buses to be purchased with sinking funds moves the state deeper into the 21st Century.
“This is the perfect venue. It’s local, which is a plus. It’s equitable, which is a plus, and it’s fair to the taxpayers, which is a plus,” he said. “And it gives the taxpayers in a local school district 100 percent of the authority to say yes, we want to spend our money in this way or no, we do not want to spend our money.”
According to Dashney, the Michigan Association for Pupil Transportation is working with districts that are interested in electric school buses as well as with utilities and other health organizations. “This is a collaborative effort to work with districts to help them apply for EPA rebate program funds and integrate electric school buses into their fleets,” he added, noting that 17 electric buses are currently deployed in seven school districts.
“We have seven superintendents, seven business managers, seven transportation supervisors, and 17 drivers with electric school bus experience, so if somebody has a particular question, there are people to answer [them],” he said.
He added that the total cost of ownership for electric buses is forecasted to equal that of a school bus powered with an internal combustion engine in two to three years, especially amid rising fuel prices.
“Batteries are getting better, alleviating range anxiety. Further the price will come down as more electric school buses are purchased,” Dashney concluded. “The transition is going to be to renewable fuels, and electric buses in school districts are giving students a healthier ride to their education.”
