Illinois school districts shifted funds, planned for higher fuel costs for buses

Last year, Illinois schools spent $1.86 billion on transportation to get students to and from school each day. In the wake of increased fuel prices, especially for diesel that school buses typically run on, school districts across the country began bracing for even higher costs.Noelle Ellerson Ng, chief advocacy and governance officer with the American Association of School Administrators, discussed a survey she conducted alongside other national organizations in May about those impacts with The Center Square.
Ellerson Ng said impacts were seen especially last school year after the conflict between the U.S. and Iran began in late February.
“About a quarter of our respondents were 11-20% over budget. And so that, and if you totaled who was running over budget by any measure, it was more than half of respondents were over their budgeted amount for transportation costs,” Ellerson Ng said.
She said with school districts running over budget, they mostly turned to different places in their transit budgets to cover the cost first, before turning to other revenue sources.
“When we dug a little deeper into what that looked like within the transportation budget, you would see them consolidating bus routes, adjusting route efficiency, they would start enforcing anti-idling measures,” Ellerson Ng said.
The Illinois State Board of Education reported during the 2025-26 school year that $1.86 billion was spent on student transportation through the year, with contractual transportation services making up $1.24 billion of the total.
In 2021, the total amount spent on transportation was $1.25 billion, meaning transportation costs have increased $610 million in five years.
The state reimburses much of the costs for things like bus driver salaries, fuel, oil, tires, and vehicle depreciation, but not all transport costs, through the Pupil Transportation Claim and Reimbursement System.
For the current Fiscal Year 2027, ISBE was allocated $809.37 million for transportation reimbursement. That number remained roughly unchanged from the prior year.
While districts had to quickly turn to fast solutions last school year, Ellerson Ng said districts were able to prepare more for the current school year according to the survey.
“Some of them added a contingency or reserve fund for fuel volatility. So essentially, they anticipated that the war might not be done or there might be continued instability in the diesel pricing,” Ellerson Ng said. “If they were using a vendor, they renegotiated those contracts, some drew down reserves. Some found additional local and state revenue specific to transportation, but that’s not an option available to all school districts.”
Diesel prices in the state have increased roughly 67 cents per gallon since mid-May, according to AAA fuel data.
While that increase has hit drivers using diesel fuel, many districts across the state are locked into transit contracts with providers like First Student, which operates roughly 6,000 buses across the state.
According to the company, its contracts are typically fixed-rate – which can assist districts from running into unforeseen costs such as increased fuel costs.

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