School districts grapple with higher fuel costs

Just a month into the academic year, school districts across the nation are facing budget strains over the high cost of diesel they must purchase to keep hundreds of thousands of buses on the road.

The war in Iran, the war sparked by Russia’s invasion of Ukraine and supply chain disruptions in the Red Sea have all conspired to send fuel prices soaring. The Energy Information Administration reported last week that the average cost of a gallon of diesel fuel in the United States stands at $6.529, up $2.78 from a year ago.

Those costs are a necessity for many school districts that still operate fleets of diesel-consuming buses.

In Austin, Texas, the Austin Independent School District spent $364,369 on fuel costs in the first month of the school year alone, nearly double the $186,447 it spent in the same month last year, said Jaime Miller, the district’s operations officer.

“The cost of diesel is on the rise, so that cost per mile is changing,” Miller told the district’s Board of Trustees at a meeting last week. “We’re watching that closely. If prices don’t start to decline again, if we were to project that out, that would add $1.9 million based on current mileage in the first month of school to our expenses.”

In a statement, Oklahoma City Public Schools said it is paying about 30% more for fuel than it did a year ago. The district has not made any cuts to transportation services so far, but a spokesperson said they continue to monitor costs and impacts on the overall budget.

In Gilbert, Ariz., the local school district is spending an additional $8,000 per week on diesel fuel.

Several districts in Orange County, Calif., have reported transportation costs as among those most likely to rise in the coming year, along with other larger portions of their budgets like pensions, health and welfare, and negotiated wages.

An annual survey by School Bus Fleet magazine found that 30% of school districts reported rising costs and budget pressures as top concerns among those who maintain bus fleets. The survey found 99% of bus fleets include diesel vehicles.

The same magazine reported that states spent at least $12.9 billion on student transportation costs during the 2024-2025 school year, though that figure does not include costs from 12 states that did not respond. New York alone spent $2 billion in state aid to local school transportation budgets, far more than any other state.

Some districts have avoided higher prices at the pump thanks to a timely shift toward electric school buses. Bipartisan infrastructure legislation signed during the Biden administration directed $5 billion to help school districts switch from diesel-powered buses to electric vehicles, spurring manufacturing in an industry already among the fastest-growing in the transportation sector.

Minneapolis Public Schools is one of those that have switched to an all-electric bus fleet. Donnie Belcher, a district spokesman, said the district operates only a few diesel-powered vehicles. Public schools in Liberty and Mesa, both in Maricopa County, Ariz., also switched to all-electric fleets, while the Gilbert school district switched to propane-powered buses.

Read more: Infrastructure bill sends states sprinting toward electric buses

The Los Angeles Unified School District is also transitioning from diesel to electric buses. A spokesperson for the school district said older diesel-powered buses are expected to need an additional $500,000 in fuel costs this year. An electric bus can save between $73,000 and $173,000 in fuel and maintenance costs over its lifetime. The district recently broke ground on a $72 million bus garage electrification project that will deliver 180 new charging stations.

In other cases, third-party vendors that provide busing services bear higher fuel costs. Fargo Public Schools in North Dakota uses a bus provider, though the district’s contract includes a clause allowing costs to rise along with fuel bills. Buses carrying children to school in Charleston County, S.C., are paid through the state Department of Education’s fuel budget.

“While higher diesel prices will have some impact on the district’s transportation budget, the state pricing helps lessen that impact,” said Michelle Mills, a communications officer with the Charleston County School District. “Historically, fluctuations in fuel costs have been manageable within our budget, and at this time we do not anticipate higher diesel costs necessitating reductions in other district programs and services.”

Even with higher gas costs, school districts’ real budget shortfalls come from other, pricier areas. The Austin Independent School Board faces a $181 million budget gap this year alone, the board said in its planning document — only about 1% of which would come from higher fuel costs.