Committee hears proposal to tie K‑12 transportation to per‑pupil payment while keeping separate funding bucket

House Bill 1214 would change how North Dakota funds K‑12 student transportation by linking transportation payments to the state per‑pupil payment while keeping transportation as a separate “bucket” of dollars rather than folding it directly into foundation aid.

Supporters told the House Education Committee that the bill is intended to end the practice of treating transportation as a budget “leftover” and to create a predictable entitlement that moves when the per‑pupil payment moves. Representative David Richter, prime sponsor, told the committee, "House Bill 1214 comes out of the interim funding task force," and that the bill’s aim is to integrate transportation funding with the formula without eliminating a discrete transportation allocation.

Proponents stressed the bill is an initial, conservative step that uses existing data and limits new reporting requirements. Burleigh County Superintendent Brandt [last name not specified], president of North Dakota Small Organized Schools, said the bill would eliminate the most problematic reporting element — annual ridership counts — and instead convert transportation expenditures into “generated students” that are multiplied by the per‑pupil payment to determine each district’s transportation payment. Mackenzie County Superintendent Steve Holden, who worked on the UND study cited by proponents, said the formula adds two district‑level factors that districts cannot easily manipulate: square miles of the district and number of buildings served. He said those two factors met statistical significance in the UND work and “start to look at what your district is and does as to what it’s gonna get funded at.”

Presenters and superintendents repeatedly described this as a multi‑phase approach rather than a final, comprehensive fix. Holden said the bill removes ridership as a driver because day‑to‑day ridership reporting lacks statistical reliability and is easily manipulated; instead the formula will rely mainly on bus miles and runs plus the two new, DPI‑available factors. He said the bill would generate modest gains for most districts and only minimal negative impacts for a very small number of districts. Holden told the committee the change does not make North Dakota reach any target percentage (for example, the 70 percent funding benchmark sometimes discussed in policy conversations), but provides a vehicle for gradual improvements in future sessions.

Rural superintendents emphasized local operating pressures. Kidder County Superintendent Rick Diegal said his district’s transportation budget is about $600,000 — roughly 10 percent of a $6 million district budget — and said state reimbursement averaged about 58 percent of his transportation costs over the last three years. He told the committee driver recruitment and rising vehicle costs are already forcing route reductions: his district reduced routes last year because it could not find a driver, even though miles did not decline. Diegal and others said school bus prices have risen sharply; one witness estimated new large buses now cost on the order of $150,000 each, and that prior federal or state bus grant programs (Volkswagen and clean‑energy grants) had previously provided substantial purchase discounts that are now diminishing.

Committee members probed how urban districts would be affected. Speakers said larger, multi‑school districts are likely to see increases under the new factors because they have more runs and buildings; Holden and Brandt both said Fargo and Bismarck would see higher generated amounts in initial modeling. Supporters said that outcome reflected underlying cost structures — more runs and more school buildings drive expenses — and that the formula attempts to address equity across different district geographies.

No formal amendments were adopted on the record; Representative Richter notified members he planned to offer an amendment that would keep transportation funding in a separate bucket (not counted inside the foundation aid weighting) and said the committee should adopt the amendment when the bill reached that point. Proponents repeatedly described the amendment as necessary to preserve the bill’s intent (that generated students not be counted in the school size weighting step of the foundation formula).

The committee heard no formal opposition and no neutral testimony at the hearing. Witnesses filed written testimony and supporting materials, including underlying UND analysis and a proposed amendment document distributed to committee members.

Proponents asked lawmakers to adopt the bill with the amendment to protect small districts from unintended weighting effects and to give districts more reliable transportation funding when the legislature sets per‑pupil payments in future budgets.