Bill 12‑14 would change K‑12 transportation funding formula, officials say it raises costs for next biennium

House Bill 12‑14, which Representative David Richter said would “change[] the way we fund the transportation, K‑twelve transportation in North Dakota,” received a detailed review Thursday in the Appropriations - Education and Environment Division.

The bill would retain bus miles and runs in the calculation but remove ‘‘riders’’ as a factor and add two new multipliers: one based on a district’s square mileage and a second based on the number of school buildings that have classes. The measure would also convert transportation funding from a block‑grant approach to a weighted student unit tied to the per‑pupil payment, so transportation funding would move up or down as the per‑pupil rate changes.

That shift matters because it changes how much state money districts will receive for busing and how increases are calculated. Representative David Richter, who presented the bill, said the formula came from an interim study performed by the University of North Dakota and an interim school‑funding task force. He told the committee the intent is to make funding more closely reflect actual transportation activity and to eliminate a recurring inflation adjustment by tying increases directly to the per‑pupil payment.

DPI School Finance Officer Adam Tesher told the committee the bill’s fiscal note appears larger than the actual additional cash the state will need this coming biennium. “We will not spend all $58,000,000 this biennium,” Tesher said, noting an expected turnback and explaining the $10 million fiscal note reflects different comparisons to cost‑to‑continue figures. He said the bill as drafted would likely result in roughly $3–4 million of additional spending on top of the $58.1 million appropriation, while larger per‑pupil scenarios (a move from a 2‑and‑2 to a 3‑and‑3 funding schedule) would raise costs further.

Committee members pressed several operational questions. Senators asked whether the bill changes reimbursement for out‑of‑district or open‑enrolled students; presenters said it does not change the existing policy that limits state reimbursement for mileage associated solely with open‑enrolled runs. Members also requested that the factor multipliers be adjusted so no district would see a lower transportation payment under the new formula: Tesher said preliminary runs showed about 10 districts could be negatively affected if the multiplier were reduced to reach a target fiscal total near $60.1 million.

Supporters said the formula would help geographically large, low‑enrollment districts that currently receive a smaller share of transportation costs, while critics on the committee and some members said they wanted safeguards to ensure no district loses money because of the change. Representative Richter and committee members discussed adjusting the multiplier (for example to 0.09 from 0.1 in the weighted unit conversion) to match a pre‑set target for the biennium; Tesher said he had run scenarios and would refine those figures.

No formal vote or formal action was recorded during the hearing; committee members asked staff to run additional calculations and to draft factor tweaks intended to hold districts harmless while moving to the new formula.

The committee will consider the bill again after staff provide updated fiscal runs and district‑level impact data.