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The House Finance Committee is calling the Hawaii Department of Education‘s bluff on school buses.

House budget writers are giving district officials millions of dollars less than the district says it needs to provide school bus service to all regular education students on all islands.

Education leaders told lawmakers earlier this session that 17,000 students on Oahu could end up without school bus services next year unless the Hawaii Legislature gave them $42 million more for student transportation than the $29 million that was already budgeted.

Gov. Neil Abercrombie had asked for only $25 million more for school buses, and last week the House handed the over to the Senate with an even lower figure set aside: $20.3 million.

“We didn’t give them anything more than what was approved by the governor, and we cut that amount by about 20 percent,” said House Finance Chairman Marcus Oshiro. “It was a collective decision from the representatives from both Oahu and the neighbor islands — both rural folks, as well as people from the urban core. I think we all understood that there’s much more to be done to cut costs in this area.”

Civil Beat’s Taken for a Ride series has documented school bus costs that doubled over five years while competition for contracts ended abruptly. Lawmakers, auditors, the Hawaii State Board of Education and the FBI have all taken note of the situation and launched their own investigations into the underlying causes. Meanwhile, the Legislature threatened to zero out funding for regular school bus routes until the department came up with a satisfactory plan for reducing costs.

Legislators weren’t entirely satisfied by a report from the department and a subsequent hearing about cost-cutting options. So they restored some of the funding for regular school buses, but not all that the department asked for.

“I think the threat from the DOE was that if they didn’t get their full request, they would cease providing school bus service on Oahu,” Oshiro said.

He says he is skeptical that the department would actually eliminate services for students. “I was not interested in giving them more money on top of what the governor approved,” Oshiro said. “I was really worried about their current ability to track and monitor the contracts and ensure we’re getting the biggest bang for our buck. I expect them to be upset, but that’s part of the process.”

He said it is clear to him that the department has “failed” in monitoring the usage and ridership of current bus routes, and that he suspects there’s a lot of room to consolidate them.

He examined Leeward Oahu in particular, which he said uses more than 70 buses, some of which take two trips per day. If each of the buses were filled to their maximum capacity, Oshiro said, the department would actually require only about 35 buses to transport them.

It’s time for the department to consider changing its habits, Oshiro said, and his committee was serious about communicating that message.

Oshiro said his committee also came up with a median daily cost per bus based on service on the neighbor islands, which are more expensive to operate because they make the longest runs. He took that median cost and applied it to all the contracts statewide to come up with a dollar figure for all regular student transportation next year. That worked out to $20.3 million and would be in addition to the $29 million already set aside for special ed students, homeless kids and others who qualify for mandatory transportation under federal rules.

That $49 million is about what was appropriated by the Legislature last year for bus service. But the state actually spends about $75 million for student transportation including federal funds and money the department transferred from other programs in order to pay bus contractors.

And Randy Moore, assistant superintendent of school facilities and support services, insists it will be necessary to cut student services if the full $71 million the department requested for school buses next year is not filled. He’s just not sure yet which services will be cut — transportation or something else.

“If the appropriation for student transportation is less than the cost of providing the service, either student transportation service will be reduced or other educational programs will be reduced,” he wrote in an email to Civil Beat last week. “While DOE has been working with bus contractors on a variety of student transportation cost reductions, the dollar amount of cost reductions that can be achieved in fiscal year 2012-13 will not be large, unless service is reduced significantly. The likely result of underfunding student transportation costs will be a range of program reductions, including student transportation.

“Which programs will have to be reduced or eliminated will be a painful decision for both DOE administrators and Board of Education members. The objective will be to minimize the long-term negative impact on students of program reductions.”

The budget will still go through more iterations as it passes through the Legislature, and Oshiro said he expects his proposal to be taken seriously and spark some lively dialogue.

“The good thing about it is that, in the normal course of the process, (department officials are) going to see this and probably react to it with grave concerns and criticism, which I expect and accept,” he said. “Then they need to come back and explain and re-justify their request to the senators downstairs. (Senate Education Chairwoman Jill Tokuda) is tough, and (Ways and Means Chairman David Ige) is going to be tough, too.

“I think you’ve touched a nerve, and it’s all going to the good of the state. Any dollar we spend getting kids to and from school is a dollar less we’re spending on actual learning in the classroom.”