Stateline Story

Soaring Fuel Costs Break School Budgets

  • September 15, 2005
  • By Kavan Peterson

Classes barely have started, but school officials nationwide already fear that soaring fuel prices caused by Hurricane Katrina will burn through their annual budgets for bus transportation and heating long before the academic year ends.

Many schools districts already are looking for ways to save on fuel and have asked that public schools be exempted from state gasoline taxes, or that state lawmakers appropriate emergency funds to help cover expected record heating costs this winter. In one North Dakota school district, cheerleaders will have to hitch a ride on the bus with the football team to away games. And diesel fuel had to be shipped by barge to South Carolina to keep school buses running after fuel pipelines from the Gulf of Mexico were severed by Hurricane Katrina.

School administrators say they already had pumped up their fuel budgets for this school year but had not anticipated the record-high diesel fuel prices that soared after the hurricane to $2.90 a gallon this week from $1.90 per gallon a year ago, according to AAA. Compounding matters, utility companies nationwide are warning that natural gas prices for heating will jump 30 percent to 70 percent nationwide.

States with wide-open spaces, including much of the West and Midwest, are especially hard-hit by the soaring price of diesel fuel needed for their bus fleets. School districts in some states, including Alabama, Colorado, Georgia, North Dakota, Ohio and Washington, are considering cutting back school athletic activities that involve long-distance bus trips, or have stopped transporting children who live within walking distance of school.

The escalating prices compound what school officials say has been chronic under-funding of public schools by the state and federal government in recent years.

"Our schools, especially rural ones, have been struggling just to keep their doors open," said North Dakota state Superintendent of Schools Wayne G. Sanstead. "The potential now for real harm is considerable."

One of the hardest-hit states is South Carolina, which nearly ran out of diesel fuel for its fleet of school buses last week after the hurricane shut down the two commercial pipelines that transport most of the state's fuel. The state was forced to contract with a temporary fuel supplier that transports by barge to provide the 75,000 gallons of diesel fuel per day needed to operate the state's 5,000-bus fleet.

"Obviously this was too close for comfort, but we believe that we have a short-term solution to our bus fuel problem," Superintendent of Education Inez Tenenbaum said.

Longer-term, however, record diesel prices will cause at least a $3.6 million shortfall this year, Tenenbaum said. She has notified the governor and state lawmakers that a special session of the Legislature to boost school funding may be needed if fuel prices do not fall soon.

Unlike in South Carolina, where the state department of education doesn't pay the state's 16-cent-per-gallon fuel tax, most other school districts contract fuel on their own and are subject to state taxes.

That's why school officials in some states, including Arizona, North Dakota and Ohio, have requested that public schools be exempted from paying state fuel taxes. Georgia Gov. Sunny Purdue (R) suspended the state motor vehicle tax for all drivers until the end of the month, and West Virginia Gov. Joe Manchin (D) has proposed a one-year gas tax suspension.

Arizona Gov. Janet Napolitano (D), who last week ordered the state's 200 school districts to report any fuel-related budget issues to her administration, does not support suspending the state's fuel tax, her communications director, Jeanine L'Ecuyer, said.

"There's no guarantee that if we removed the state's 18-cent (per gallon) gas tax, the oil companies wouldn't just raise the price of gas by 18 cents," L'Ecuyer said.

Devils Lake, N.D., public school Superintendent Steven Swiontek sent a letter to Gov. John Hoeven (R) this week requesting that schools be exempt from the state's 23-cent-per-gallon gas tax. Swiontek said he's already made minor cutbacks such as making the cheerleaders ride the same bus as the football team, but may have to go further and drop some sports or lay off teacher's aides.

And with heating expenses slated to rise at least 30 percent this winter in a state where the wind chill often exceeds 40 below zero, Swiontek said the worst is yet to come.

The steepest increases in natural gas prices are expected in Midwestern states that most depend on Gulf suppliers that were damaged by the hurricane. Canton, Ohio, residents this week were told to expect to pay 73 percent more this winter for natural gas. "We don't have anywhere near enough money to cover this," said Tad Ellesworth, business manager for Canton Public Schools. "There almost have to be cuts in every school district in Ohio."