Minneapolis Public Schools is working to close a $110 million budget gap next school year, even as its transportation costs will increase 12%, offsetting some of the proposed cuts to the district’s central office budget. In 2024-25, the district expects to spend $73 million on transportation, eating up nearly 10% of the district’s operating budget.

Since the 2019-20 school year, transportation spending in the district has increased by more than 90%, while the overall operating budget has increased by 28%.

In a report critical of the district’s budget practices, the Minneapolis Federation of Teachers singled out the district’s spending on contracted services as one area where the district can trim its budget. For the current school year, the district has budgeted $102 million for contracted services. Transportation makes up about 30% of that amount.

Over half of district transportation costs come from mandatory services it provides for a subset of special education students and homeless students. State aid reimburses the district for the cost of special education transportation, and starting next year the State will also reimburse the district for the cost of transportation for homeless students.

The State special education transportation aid is reimbursed in the year after the district incurs the costs. When costs are increasing, this means the district must cover the difference between the current year’s expenses and the previous year’s expenses during the current fiscal year.

Transportation costs are increasing for two main reasons: an increasing number of students are qualifying for special education and homeless transportation, and the cost of providing bus services is increasing. Transportation costs for the district are also higher than in other districts because the district provides bus service to students who live closer to school compared to other large districts.

The increasing number of students qualifying for Special Education and homeless student transportation

District transportation costs are increasing because of the growing number of students who qualify for specialized transportation services either as part of their special education services or because the student qualifies as homeless or highly mobile.

The number of students qualifying as homeless and highly mobile has nearly doubled since the 2019-20 school year, according to data from the Minnesota Department of Education. While students receiving special education transportation services made up only 8% of the students transported by the district in the 2022-23 school year, these services accounted for 45% of the district’s transportation costs that year and about one third of the projected increase in transportation costs next year.

Special education transportation services vary by student needs, but often include bus service from a student’s home address to their school. In some cases, students may also qualify for a bus aide, either one-to-one or in a small group.

In 2022-23, the district spent about $21 million on bus service for around 1,700 special education students. That increased to about $26 million this year, with the number of qualifying special education students increasing to around 1,900. Next year, the district estimates special education transportation will cost $28 million.

The district also provides specialized transportation for students without stable housing. Students who qualify as homeless or highly mobile under the federal McKinney-Vento Act, passed in 2001, must have the option to remain in their current school even if they move outside the attendance area. The act requires the district to provide transportation to those students.

When students move within district boundaries, the district typically adds the students to existing bus routes. But when students move outside district boundaries, they are typically provided a cab or van to and from school. In December 2022, the district reported about 900 students were receiving transportation by cab or van, with that number increasing 40% this school year. Each vehicle may provide transportation for up to five students.

The district estimated in December 2022 that each homeless and highly mobile student costs about $40 per day to transport, compared to about $5 per day for a general education student.

The number of homeless students has been increasing steadily in recent years. The most recent data from the Minnesota Department of Education is from the fall of 2023. That data shows that over 1,700 district students qualified as homeless and highly mobile. Although Minneapolis Public Schools enrolls only 3% of the State’s public school students, it serves over 17% of the State’s homeless students, according to State data.

The number of qualifying students plummeted in the first year of the pandemic to fewer than 300 students. The combination of an expanded social safety net, the eviction moratorium and a likely undercount of students while the district remained in distance learning contributed to the drop in the number of homeless students.

The State data is based only on students who qualify as of October 1, and significantly undercounts the actual number of homeless students the district enrolls. According to the district’s own data, there were 2,461 students who qualified as homeless at the end of the 2022-23 school year. By December of 2023, the district had identified 2,171 students who were homeless. The December data does not include many of the new to country students who have enrolled since this fall, who also qualify for homeless and highly mobile services. Students must be requalified each year, which requires school social workers to connect with families over the summer to ensure support is in place for students for the upcoming school year.

As the number of qualifying students has increased, so has the cost of transportation for homeless and highly mobile students. In 2022-23, the district estimated it was spending about $9.7 million on transportation for students qualifying as homeless and highly mobile. This year, the cost has increased to about $11 million. Next year, the district expects its costs to be nearly $17 million.

Last spring, as part of the $2.2 billion in new funding for schools, the legislature changed the special education aid formula to include reimbursement of all costs for transportation for homeless and highly mobile students starting with the current school year. Prior to this, the district would qualify for some reimbursement of these costs under an older formula in some years, but not in others.

The district will receive the reimbursement for costs incurred this year as part of its State aid next year. That means in 2025, the district can expect $11 million in State aid that will actually cover the $17 million in transportation costs for 2024. In 2026, the district can expect the $17 million in State aid to cover the year prior’s transportation costs.

Increasing costs of providing bus service

The cost of using outside contractors to provide bus service increased significantly in the 2022-23 school year. The district had several multi-year transportation contracts in place when the pandemic began, with provisions to limit the annual increase in the price of contracted bus services. As the cost of fuel and labor increased in 2021 and 2022, the district was partially insulated from the price increases faced by its contractors.

However, in 2022, the district’s contracts expired, and prices for contracted services increased about 50%. The district’s senior finance officer, Ibrahima Diop, explained the increase in contract costs to the school board’s finance committee at a meeting in October 2022. The original budget for the 2022-23 school year included $43 million for transportation. But in December of 2022, the board passed an amendment to the budget to add $16.5 million in additional funds from the district’s federal pandemic aid to cover the increased costs of its contracted bus services.

Prices for contracted services have continued to rise, and in the 2024-25 school year, the price will increase an additional 2.5%. While contractors provide about 60% of student transportation, the other 40% is provided by the district’s own buses and drivers. The district settled a new three year contract with its drivers’ union in 2022 which expires at the end of June. That contract increased drivers compensation by 9.9% in 2021-22, 0.8% in 2022-23 and 3.2% this school year.

The district has also added additional transportation services for high school students this year. The district operates a shuttle between each high school and the district’s centralized career and technical education centers at North, Edison and Roosevelt high schools. The district also added bus service for North High School students who live within the school’s enrollment zone. Eligible North High School students continue to receive a Metro Transit Go-To card in addition to the new bus service. Together, these additional services cost about $2 million.

Minneapolis Public Schools provides more transportation services than required by State law and other large districts

Minnesota law requires districts to provide bus service to students who live more than two miles from the school where they enroll, if they live within the district’s boundaries. The district provides bus service to all elementary students who live more than one half mile from their neighborhood school or magnet school. For some schools, the district extended bus service within a half mile radius of the school as part of the comprehensive district design in response to parents’ concerns about safety for students walking to school.

Middle school students who live more than a mile from the school where they are enrolled receive bus service. Like with elementary schools, some middle schools also have expanded bus service within one mile of the school to address safety concerns. Eligible middle school students can elect to receive a Go-To card instead of bus service.

High school students who live more than two miles from school receive a Metro Transit Go-To card to cover the cost of bus service between home and school. High school students who are eligible for free and reduced price meals also qualify for a Go-To card, regardless of how far away from their high school they live.

St. Paul Public Schools provides bus service within the same radius of school for elementary and middle school students. But some high school students also receive bus service if they live more than one mile from their high school.

In other large districts, students must typically live farther from school than Minneapolis elementary and middle school students to receive bus service. In Anoka-Hennepin Public Schools, all students receive bus service if they live more than one mile from school. In Rosemount-Apple Valley-Eagan, elementary students living more than one mile from school, and middle and high school students living more than one and a half miles from school, are eligible for bus service.

Osseo Public Schools provides bus service for elementary students who live more than 0.8 miles from school, while middle and high school students must live more than two miles from school to qualify for bus service.