Privatized School Transportation Costs More

This study reveals the actual costs behind the privatization of school bus services to local districts, the state and taxpayers.


A full scale study of the costs of privatized bus transportation in the state of Pennsylvania where 72% of these services are privatized. It dramatically shows it cost more, especially after year one.


It is estimated that if districts switched to the self-supply of transportation services, total spending on student transportation services would dramatically decrease with all of the cost savings accruing to the state.


Researchers found:
    •    Contracting out significantly increases total costs. For example, if the “typical” district (with enrollment and other variables equal to the average for all districts) shifts from contracting out none of its transportation services to contracting out for all of its services, costs increase an estimated $223,861 (in 2008 dollars).
    •    Contracting out also increases costs to the state, in part because the state reimburses contracted transportation services at a higher rate than district self-provided services. In the typical district, increasing contracting out from zero to 100% increases costs to the state by $231,903.
    •    For local school districts, there is no statistically significant difference (at the 5% level) between what they pay for transportation services when they contract out versus when they self-provide transportation—in effect, the more generous state reimbursement of contracting out compensates for the increase in total costs.

This is an independent analysis and probably the most extensive and recent, March 2012, anywhere in the country.

Why does contracting out cost more than self-providing transportation services? Read the study.


More places to find out about it:

Runaway Spending: Private Contractors Increase the Cost of School Student Transportation Services in Pennsylvania

NEA Today (summary of this research): http://neatoday.org/2012/04/09/outsourcing-school-services-is-a-poor-bargain/

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