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Hawaii lawmakers are on the verge of lopping off some $22 million from the Department of Education‘s school bus budget, which officials say will force thousands of students to find new ways to get to class.

But unlike in previous years when parents and bus drivers waved signs in protest, this time the public has been quiet. Instead, filling the void has been a flurry of doomsday memos and emails between educators and legislators.

House Finance Chair Marcus Oshiro penned a letter Thursday that called the DOE’s tactics “irresponsible fear-mongering.”

“Your Department has taken the extreme and inflammatory position that if the status quo is not continued, your Department will cease services to communities throughout the State,” he wrote.

The letter was addressed to Superintendent Kathryn Matayoshi but CC’d the governor, Board of Education and the entire Legislature. It notes the “numerous communications” that the DOE issued over the past week.

Specifically, Oshiro cites:

• An April 13 flyer from Assistant Superintendent Randy Moore listing schools that may have bus service eliminated
• An April 13 email from Communications Director Sandy Goya saying the department is holding off on sending Moore’s memo
• An April 19 email from Complex Area Superintendent Patricia Park urging DOE employees to contact Oshiro and Senate Ways and Means Chair David Ige to “influence decision makers” on how to handle the shortfall.

The window to have a say in any solution to the matter is closing fast. The Legislature plans to pound out the state’s overall budget bill in conference committee by early next week. Senior lawmakers have said the cuts are coming.

The department is bracing for the shortfall. While Matayoshi will not make a formal recommendation to the board until the Legislature finalizes the budget, school officials are compiling contingency plans.

Two measures the department discussed at the board’s April 3 meeting included suspending routes altogether and increasing the distance between students’ homes and school before they can qualify for bus service. Raiding education programs outside the transportation budget will also be weighed, officials said, but no specifics have been made public yet.

“It is interesting that there has been surprisingly little public comment on the fact that half of all the students who now ride the bus won’t have that opportunity in less than a few months,” said Moore, assistant superintendent of School Facilities and Support Services. “I don’t know if everyone is just resigned to it or they think someone is obviously bluffing.”

He said in an interview Tuesday that up to 25,000 of the 42,889 students who are eligible for regular bus service will likely be walking or hitching an alternate ride to school next year.

The department requested $42 million from the Legislature for next fiscal year. The House budget bill calls for $20.3 million and the Senate’s version includes $23 million. The governor had asked for $25 million.

Senate Education Chair Jill Tokuda said Thursday that lawmakers recognize the importance of bus services but some tough decisions have to be made.

“I would hope that we can give as much as we can to maintain some level of services, but the request that has come in is very high and given our continued financial constraints I don’t know what’s really going to be realistic,” she said.

Lawmakers from each chamber planned Thursday to go over the parts of the budget they agreed on before switching gears Friday to review the 180-some pages of “disagrees,” Tokuda said. The hope is to finish the budget bill Friday, but she said it will most likely wrap up early next week.

From ‘Warning’ to ‘Reality’

Student transportation budget shortfalls like this are nothing new in recent years. What has changed, Moore said, is the department’s ability to cut programs or shift money around to cover it. He referenced the tens of millions of dollars from the American Recovery and Reinvestment Act that was used to maintain services this year.

“There is no source of funds like that this year,” he said. “If the Legislature fails to appropriate what we need, then what we need to do is go looking through all the other programs and see if there is something of lower priority than student transportation. That’s always a challenge.”

When lawmakers gave the department a lot less than it said it needed last year, Tokuda said, they knew federal education jobs money could “fill the void.”

“Last year was the warning,” she said. “This year is the reality.”

The DOE has faced intense scrutiny after news spread of school bus transportation costs tripling since 2003 to $72 million in 2009. In his letter, Oshiro said under the terms of the current contract as negotiated between the DOE and bus companies, the cost to transport kids to and from school each year is $79 million.

“This exceeds the total budgets of seven entire State Departments,” he said, underlining and bolding the sentence. “… The millions that are being spent inefficiently are wasted. The millions that are wasted should be put to better use.”

Civil Beat has been investigating the runaway costs in its Taken for a Ride series which has documented the mysterious drop-off in bidding among longtime school bus companies. Messages left this week seeking comment from the Hawaii School Bus Association, which represents some 12 companies, were not returned by deadline Thursday.

Based on Oshiro’s comments and how lawmakers are budgeting again this year, they seem to think the department can do a lot more to reel in student transportation spending.

The Senate, for instance, is looking to give the department $15 million — some $3 million more than requested — for the weighted student formula plan, Tokuda said. This means individual schools could see hundreds of thousands of dollars more infused into the classrooms.

“I definitely recognize that for many families and many communities, access to transportation to and from school is critical,” Tokuda said. “So the real question is how do we continue to provide those services … at a cost that’s sustainable.”

The senator said she is optimistic the state auditor’s investigation into the issue will help “refocus” student transportation from a service and cost perspective.

“Unfortunately, we’re not going to have that information until later this year,” Tokuda said. “My hope is it provides good information and better insight into the program. I’m really crossing my fingers on that one … but I’m sure it will uncover more questions that will need to be answered going forward.”

Education Board Chair Don Horner has said since November that the board has “gotten the message” from the Legislature. He has pointed at the joint effort with the department to rein in spending and increase revenues.

Bus fares, for instance, have more than tripled in the past three years while the qualifying distance has increased.

From January 2004 to December 2009, a one-way fare cost 35 cents. It jumped to 75 cents in January 2010 and then to $1.25 in August 2011. Quarterly and annual passes rose at similar rates over the same period.

Oshiro said in his letter that families must pay around $270 for their children to ride the bus annually.

“As only 50% of the riders are paying, your Department collects approximately $2.75 million toward the total transportation costs,” he wrote. “The State must therefore pick up nearly 94% or $41 million of the total cost, all of which comes from taxpayer dollars.”

The department is unlikely to propose another fare hike this year. While simple to implement because it only takes a DOE recommendation and board approval, savings would be minimal due to decreased ridership, according to a March 30 memorandum from Moore to Matayoshi.

Fare revenues totaled $2.4 million last fiscal year, Moore said. The estimate for this year is $3 million, he said. Earlier years were closer to $1 million.

Students in grades K-5 who live within 1 mile from school are eligible for bus service. While this has remained unchanged for them, the distance for grades 6-12 increased from 1 to 1.5 miles in July 2009.

One of the “desirable” options the DOE may recommend to the board proposes increasing the qualifying distance for grades 6-12 students from 1.5 miles to 2.

Moore’s memo says this action would likely reduce secondary bus ridership by 10 percent. This translates to a revenue reduction of $150,000 and a cost savings of $750,000.

“An increase in the qualifying distance to 3 miles would significantly reduce ridership and costs,” the memo adds.

Increasing the qualifying distance would require the DOE to send the recommendation to the board for an amendment to Hawaii Administrative Rules Chapter 8-27. This would necessitate a public hearing and governor approval, likely a six-month-long process.

Pitfalls in Plugging the Shortfalls

Moore said there will be two parts to the department’s recommendation later this month to the board, which is expected to hear the matter at its May 1 meeting.

The first is how much money, if any, can be shifted from other programs to pay for bus services. The second is what additional funds can be eked out of the student transportation services budget by eliminating routes.

“Because the DOE has cut, cut, cut, cut for four years, a number of programs are simply eliminated,” Moore said. “We’re getting to the point where there is less that is eliminatable without major pain.”

Canceling bus contracts presents its own challenges, he said. There is a steep cancellation, or idling, cost if the contract is ended in the middle of its term.

The department considers eliminating bus routes a “desirable” option in its data sheet on how to address the shortfall. Moore’s memo notes the savings, even after factoring in the idle bus charge — a sort of contract cancellation fee — is about $300 per school day.

Most the contracts are for six years, Moore said, but some are 10 years. Phasing them out without this charge is an option, but this would require time and a financial cushion.

Tokuda said she has asked the department to look at the “financial disincentives” to cutting routes when it goes to prioritize them.

“Money we pay for penalties is money out the window,” she said, referring to the idle bus charge. “That’s lost funds right there.”

Matayoshi touched on the particular challenges of covering the shortfall in her April 2 testimony to the Legislature. Since the legislative intent is unclear and a 2011 proviso has not been amended to allow for spending on services other than those mandated by federal or state laws, she said this may force the department to slash general education services on all islands.

‘Internal Solutions’

The department is working on a letter to notify parents and students about the expected impact, advising them to start exploring alternative transportation options. It was going to be sent out Friday, but was pulled back for further consideration.

The letter says the reduction to the DOE’s transportation budget by $20 million will potentially eliminate bus service for high school students statewide, almost all intermediate and middle school students, and many elementary schools.

Tokuda said she was glad the letter was not sent, interpreting this to mean the department is exploring other “internal solutions.”

Matayoshi put the shortfall into perspective. She said if all bus services were eliminated on Oahu for general education students, the projected savings, roughly $15.6 million, would still not cover the gap.

There has been minimal public outcry over the expected impacts of the budget shortfall. Moore and Tokuda said they had heard little from concerned parents.

“I think it’s one of those situations where the outcry will come when those services are no longer available,” the senator said. “People are so busy with their everyday lives … we really haven’t heard too much here.”

Messages left Thursday seeking comment from the Hawaii State Parent Teacher Student Association were not returned by deadline.

Bus service will continue uninterrupted for special needs students receiving curb-to-curb services, students who transfer to another school under certain No Child Left Behind provisions, and homeless students. Some 3,700 students receive curb-to-curb service, Moore said.

Read Oshiro’s scathing letter to Matayoshi, as well as supporting documentation of the doomsday emails:

DISCUSSION: How do you think education officials should address the major shortfall that is expected for student transportation services? Or should the Legislature prioritize its budget differently?