School Bus Transportation News at STN Media

65 Percent Solution a Diminishing
School Bus Threat

But program designed to put more money in classroom appears to still have an affect on certain states

Michael Levin-Epstein | Contributing Editor

Several years ago, a hot new idea in education reform was referred to as the “65 Percent Solution.” It was touted as the panacea for local budgetary woes to the quality of American education. But the concept may be losing some momentum. And, while the effort does not yet appear to be hurting transportation on a national scale, some district operators remain concerned.

The pet project of Patrick Byrne, head of First Class Education (FCE) and also the chairman of discount Web site Overstock.com, the 65 Percent Solution’s central tenet is school districts should dedicate 65 percent of their revenues to efforts related directly to the classroom learning. The driving force behind the initiative, according to Byrne, is to get schools to adopt better business practices, thus freeing up additional money for true education. Business schools teach best practices and benchmarking to determine how well companies are doing, he notes. So why should schools be any different?

Four years ago, he notes, the National Center for Education Statistics (NCES) reported that seven states “voluntarily” placed at least 65 percent of their operational budgets in the classroom. Today, at least six states have adopted or are in the process of instituting a 65 percent requirement for their school districts, according to FCE spokesman Tim Mooney.

In Georgia, legislation recently was signed by the governor, while Louisiana lawmakers referred the initiative to the state education agency to be implemented, Mooney notes. In addition, Kansas approved the concept, while the issue is on the ballot in Colorado, Ohio and Oklahoma. It will also be before voters in Florida, though the legislature recently spurned Gov. Jeb Bush’s efforts to introduce a bill.

And, in Texas, Gov. Rick Perry issued an executive order requiring the state’s school districts to devote 65 percent of their budgets to “classroom activities,” and instructing the Texas Education Agency to develop regulations for compliance. Rita Chase, director of the TEA’s Division of Financial Audits, notes the regulations developed by TEA were published Aug. 4 and became effective Aug. 13 for the 2006-2007 school year.

Under the rules, transportation costs do not count towards the 65 percent requirement, Chase says. Other costs excluded are child nutrition, security, general administration, maintenance, and curriculum and staff development, as they are all necessary expenses for school districts, she notes, adding some districts argued for including it in instructional spending. Districts also face continuing problems with transportation costs “because of not having control over the rising cost of fuel,” she reports. Under the regulations, districts do not face sanctions if they fail to meet the 65 percent goal but must post information on their spending on their Web sites.

It may be obvious why school administrators adamantly oppose the concept, as it equates school budget woes to high salaries, benefit packages and retirement packages. But even the Parent Teachers Association objects because it sets a mandate of an artificial benchmark on schools and eliminates local control, says Robin Leeds, a consultant with NSTA. And it makes no appropriation of new funds; it simply moves existing money around.

So are transportation directors worried? Adriana Villarreal, spokeswoman for the Houston Independent School District, reports officials don’t see any immediate impact on district operations.

“It’s not going to affect us at all — at least this year,” Villarreal says.
Mark Lindstrom, transportation director for the Troup County Schools and president of the Georgia Association for Pupil Transportation, reports there has “obviously been some concern in some school districts” on the initiative’s effects on transportation services. However, he explains, no immediate effects are apparent.

“Everyone was hoping transportation would not be considered an auxiliary operation,” he says. “If we don’t get the students to school, how are they going to learn?”

Rising fuel prices aren’t helping matters. Troup County, which currently operates 140 buses daily, has seen its fuel costs triple within six years. That affects the calculation of the cost percentages attributed to “non-classroom” expenditures, but it isn’t an item that can be controlled by the districts, he adds.

Colorado opponents of the proposal argue a proposed 65 percent mandate would force districts to lay off “counselors, school nurses, bus drivers, food service workers, clerical personnel, custodians and others.” Coloradans for Excellent Schools contends the proposal undermines local control, imposes a “one-size-fits-all” mandate on districts regardless of their needs, and “simply rearranges school funds” without providing additional funding, while creating the impression that it increases money for schools. “Ultimately,” the group says, “children will be hurt because services critical to their well-being—such as safe transportation, nourishing meals and secure schools—will be cut.”

There’s no need for transportation officials to be overly concerned about the 65 Percent Solution, says Mooney. Under the definition of instructional expense used by FCE, which tracks that of NCES, districts with higher than average transportation costs can apply for a waiver. If a district’s transportation costs are high, “we want them to at least tell us why,” he says. “We want to encourage cost savings wherever possible in transportation budgets — specifically in the number of cars school districts have or are reimbursed for. We think that number of cars now is just plain unconscionable.”

Still, NSTA’s Leeds says the proposal “has lost a lot of steam” since it was first introduced, and appears to have had “little or no effect” on transportation operations. While the FCE model doesn’t include transportation expenses as part of instructional costs, some states have recognized and accommodated the need for transportation funding, according to Leeds. For example, Minnesota lawmakers succeeded in dropping transportation and food service costs from the formula in legislation offered this year, after concluding those costs vary significantly among districts, she notes. That legislation also increased the goal of classroom spending from 65 to 70 percent—with the average for Minnesota districts turning out to be 69.2 percent, Leeds reports. And Missouri lawmakers failed to pass a 65 percent measure last year, notes Donald Fowler, head of Fowler Bus Co. in Richmond, Mo.

The 65 percent concept, Leeds concludes, “seemed at one time to be a real threat.” But recently, she adds, as more questions have been raised about the idea, there has been less interest because “the answers have not been entirely satisfactory.”