Schumer Proposes Enhanced Hybrid School Bus Tax Credit that Could Save Districts Millions in Fuel Costs, Lower Fuel Usage; Pushes Program to Provide Emergency Energy Grants to School Districts Struggling with Increased Fuel Costs


As Upstate New York school districts gear up to welcome students back in just a few weeks, U.S. Senator Charles E. Schumer today detailed how the skyrocketing cost of diesel is wreaking havoc on school budgets. Upstate New York school districts will spend a projected $43 million more in fuel costs this year than last year. With 83% of Upstate New York State school districts paying for their own fuel, most school boards have already increased their transportation budgets for the 2008-2009 school year by an average of 28% in anticipation of rising energy costs. Despite best laid plans, Upstate New York school districts will still face shortfalls totaling over $25 million if the diesel price stays at its current level.

To help ease the pain on local school districts, Schumer announced a plan to help school transportation become more fuel efficient by alleviating some of the upfront cost burden of purchasing hybrid buses, which get significantly better gas mileage than a standard yellow bus. Schumer’s enhanced Hybrid Tax Credit proposal would expand upon a credit in current law by taking into account a far greater percentage of the cost difference between a regular bus and a hybrid bus when calculating the credit. To provide some immediate relief to the hardest-hit school districts, Senator Schumer is introducing the School Energy Crisis Relief Act of 2008. The legislation would help the hardest hit districts by authorizing the U.S. Secretary of Energy to provide emergency energy grants to school districts that are struggling with the added and unexpected costs their system must assume due to the recent spike in fuel costs.

“No school should have to make a choice between books and transporting kids. Diesel fuel costs are slamming school districts and placing too heavy of a burden on our schools’ budgets,” Schumer said. “An enhanced hybrid school bus tax credit will ease some of that burden so that schools can put resources where it matters: towards our kids’ education.”

In the face of skyrocketing diesel fuel costs, Upstate New York school districts are struggling to make ends meet. The impact is wide-spread – across Upstate New York, school districts will pay a projected $43 million more in fuel costs this year than last year. Moreover, school districts have already increased transportation budgets an average of 28% in anticipation of rising energy costs.

Schumer today released region by region data detailing how much more school districts in each county will pay due to rising energy prices.

In the Capital Region, schools will spend approximately $6.34 million more on fuel expenses this year, and will face a $3.67 million transportation budget shortfall.
In the Central New York Region, schools will spend approximately $5.56 million more on fuel expenses this year, and will face a $3.22 million transportation budget shortfall.
In the Hudson Valley, schools will spend approximately $8.80 million more on fuel expenses this year, and will face a $5.10 million transportation budget shortfall.
In the North Country, schools will spend approximately $4.35 million more on fuel expenses this year, and will face a $2.52 million transportation budget shortfall.
In the Rochester-Finger Lakes Region, schools will spend approximately $8.36 million more on fuel expenses this year, and will face a $4.84 million transportation budget shortfall.
In the Southern Tier, schools will spend approximately $4.62 million more on fuel expenses this year, and will face a $2.68 million transportation budget shortfall.
In the Western New York, schools will spend approximately $10.50 million more on fuel expenses this year, and will face a $6.08 million transportation budget shortfall.
Some school districts own and operate their own school buses, while others use contractors. However, even those who use contractors are often responsible for paying fuel expenses. The New York State Pupil Transportation agency estimates that 83% of school districts pay for fuel expenses, either because they own and operate their own fleets or due to their contractual agreement with a bus company.


Rising fuel costs are taking such a toll on school system budgets that they are taking drastic measures to conserve energy, including consolidating bus routes, removing bus stops, eliminating or modifying extracurricular and athletic offerings, and in some cases even eliminating personnel positions, according to a new survey by the American Association of School Administrators. Schumer noted that while the short-term solutions are critical to saving fuel costs, more needs to be done to help schools cope with the rising costs of fuel.

According to the study, 59 percent of school districts nationwide are implementing energy conservation measures and 44 percent are cutting back on student field trips, 37 percent are cutting back on heating and air condition use. Moreover, 31 percent of school districts reported cutting back on buying supplies, while 29 percent said they are delaying non-essential facility upgrades and repairs. Twenty-nine percent of the school districts said they are eliminating or modifying instructional personnel positions and 21 percent said they are eliminating or modifying administrative personnel positions.

Hybrid buses can save school districts a considerable amount of money. Traditional yellow school buses are able to travel approximately 6 to 8 miles per gallon, depending on the route, while hybrid buses can get up to 12 miles per gallon. If Upstate New York switched its entire fleet of buses to hybrid models, the state would save approximately $41 million during the 2008-2009 school year as a result of higher fuel economy. While the upfront costs of purchasing a hybrid vehicle are substantial, the long-term cost savings can lift a significant burden from school district budgets.



Recognizing the difficulties faced by school districts and providing a new incentive for districts to upgrade their school bus fleets and save money on fuel, Schumer’s enhanced Hybrid Tax Credit bill increases the maximum incremental cost for school buses in the existing hybrid credit by 200 percent next year, 150 percent in 2010, 100 percent in 2011, and 50 percent in 2012.

The current law bases the available tax credit on the weight and fuel economy of the bus. Because most hybrid buses weigh under 26,000 pounds, the maximum credit under current law for them is just $6,000. However, hybrid buses can cost upwards of $100,000 more than a regular diesel bus. That cost differential is too great for many school districts to consider replacing yellow diesel buses with hybrid models, even with the tax credit. While advances in technology are expected to substantially lower the price of hybrid buses in the coming years, schools need fuel price relief and affordable options now. Schumer’s proposal will expand the current tax credit for hybrid buses to make hybrids more affordable today. For instance, under Schumer’s proposal, the maximum credit for a 24,000 pound hybrid school bus will increase to $18,000 next year, three times the current credit.

While a nontaxable entity like a school district can’t take advantage of the hybrid bus tax credit, the bill requires that the credit be transferred to the buyer in cases where the buses are purchased directly by the district. The transfer of the credit is worked right into the sales contract to ensure that the savings get passed on to the school district.



To provide some immediate relief to the hardest-hit school districts, Senator Schumer introduced the School Energy Crisis Relief Act of 2008. The legislation would help the hardest hit districts by authorizing the U.S. Secretary of Energy to provide emergency energy grants to school districts that are struggling with the added and unexpected costs their system must assume due to the recent spike in fuel costs. Each eligible school district (to be eligible, schools must be considered low-income by the Elementary and Secondary Education Act of 1965) would submit an application to the Department of Energy in order to participate in a competitive grant process. The Department of Energy will review the applications and provide grants to high-need districts in all 50 states, and will determine the total amount received in each State based on a State’s total population of youth ages 5-17 and their regional fuel cost (as a comparison of the national average fuel cost). The total amount of grant awards that a Secretary makes in each State must equal, in the aggregate, the amount originally determined for that State. The determination of each State’s total will be made using the most recent data from the U.S. Census and the Energy Information Administration (U.S. Department of Energy).