Tag Archives: Funding

This Financing Model Could Make School Buses Cheaper and Greener, But No One Is Using It

Every day, nearly 500,000 school buses transport students to and from school in districts across the country. Many of these buses are older diesel models that release dangerous emissions, harming both the environment and student health. While cleaner and cheaper alternative fuels like propane, compressed natural gas (CNG), and electric exist, higher upfront costs prevent most districts from transitioning.

The good news: there’s an increasingly popular financial tool out there that could solve this problem.

Social Impact Bonds (SIBs) are typically used to finance programs that can generate both societal benefits and cost savings, particularly programs administered by nonprofit organizations and government entities. Under the SIB model, private investors provide initial capital in exchange for a return funded from eventual cost savings. Those investors, and not taxpayers, absorb the financial losses if these programs do not achieve projected savings. SIBs have been used to fund programs related to prisoner recidivism, high-quality preschool, and reducing common health hazards, with varying levels of success. As of 2016, nine SIBs operate in the United States, with 50 more in development, representing over $90 million in private investment.

As we describe in our recent report, “Miles to Go: Bringing School Transportation into the 21st Century,” the benefits of switching to buses that run on alternative fuels are well-documented. And they cost less to run, benefiting district budgets. However, in contrast to the public transit sector, where more than one in three buses runs on alternative fuels or hybrid technology, uptake in the school transportation sector has been limited. Of all buses sold in the U.S. and Canada in 2014, only six percent were alternatively fueled. In 2012, that figure was less than three percent.

This is largely due to the additional costs associated with shifting away from diesel. Propane buses cost about five percent more than their diesel counterparts; that figure is 25 percent for buses run on compressed natural gas. Electric buses, which offer the most cost savings and environmental benefit, are more expensive still — often costing an additional $100,000 to $120,000 more than diesel buses.

Transitioning to these buses may also require infrastructure expenditures in the form of fueling and charging stations. For example, case studies from the Department of Energy estimate that installing a propane fueling station costs between $55,000 and $250,000, depending on the station’s size and equipment.

This is where SIBs can help. For SIBs to work, projects have to attract investors by demonstrating the potential for a return on investment. A number of case studies have provided evidence of the potential cost savings of switching to alternatively fueled buses, savings sufficient to offset the higher upfront cost. A 2014 report from the U.S. Department of Energy’s Argonne National Laboratory found savings of between $400 and $3,000 per bus per year associated with replacing diesel with propane, with the incremental costs of the vehicles and related infrastructure being offset over a period of three to eight years. And researchers from the University of Delaware have shown that using an electric school bus instead of a diesel bus could save a district roughly $230,000 per bus over a 14-year lifespan, with the initial investment being recovered after five years.

Alternatively fueled buses are cheaper to fuel, operate, and maintain than diesel buses. Alternative fuels cost less than diesel, and their prices remain relatively stable compared to diesel, which varies with the fluctuation of crude oil prices. There are also a variety of savings from maintenance costs. These buses use less oil and cheaper filters, and unlike their diesel counterparts, they do not require additional treatment to meet federal vehicle emissions standards, potentially saving thousands of dollars in maintenance each year.

Electric buses that use vehicle-to-grid technology — which allows vehicles to communicate and interact with the overall power grid, rather than just draw a charge from it — can even become “prosumers,” meaning they return energy to the grid. The energy stored in the buses’ batteries can be tapped to lower a facility’s electricity bill.

A SIB model for bus replacement could work as follows:

Graphic by authors

SIBs are not without criticism: they may limit the savings that governments could reap from traditional means of public investment. This is the other side of the equation when privatizing potential risk: governments also privatize some of the reward.

However, to date, most districts have not been able to invest the initial capital needed to replace their diesel fleets. Implementing a SIB model could help speed up this process without further draining district budgets. Such a program would not only benefit the environment: districts could also reinvest the savings to improve other aspects of their school transportation systems, or funnel those dollars back into classrooms. It could be a win-win.

To learn more about the current state of the school transportation sector, including how it impacts the environment, read Bellwether’s new report: “Miles to Go: Bringing School Transportation into the 21st Century.”

Donald Trump’s Election is a “Sputnik Moment” for Civics Education

Last week, the American Enterprise Institute hosted an event discussing the failings of civics education in America. The panelists referred to the dismal state of civics literacy as a “Sputnik moment” – a reference to when the Soviet Union successfully launched the world’s first satellite in 1957, stirring the United States to create the National Aeronautics and Space Administration (NASA) and dramatically increase its space exploration efforts.

Nothing illustrates this comparison better than the election of Donald Trump. As Trump has demonstrated time and time again, he knows little about governing or policy – instead relying on divisive rhetoric and petulant Twitter tantrums. His most recent gaffe: at a White House convening of the nation’s governors, Trump said that “nobody knew health care could be so complicated.” As it turns out, many people knew.

However, if Trump can name all three branches of government, that alone would put him ahead of nearly three quarters of Americans. According to a 2016 survey conducted by the Annenberg Public Policy Center, only 26 percent of respondents could name all three branches, and 31 percent could not name a single one.

Data from the National Assessment of Educational Progress (NAEP) also show poor results. In 2014 – the most recent NAEP civics assessment – only 23 percent of eighth grade students scored at or above the proficient level. The same is true of older students getting ready to vote. In 2010, when NAEP last tested high school seniors, only 24 percent scored at or above the proficient level. Neither of these results has changed significantly since 1998.

At the same time, faith in many of America’s institutions are at historic lows – even before Trump’s election. And it’s likely that his constant attacks on various institutions will only serve to worsen these numbers. This crisis of confidence only feeds into the growing level of polarization, making it nearly impossible to govern effectively. It’s no wonder that recent congresses have been arguably some of the least productive ever.

Confidence in Institutions

Despite these difficulties, the American people seem well aware of the problem at hand. According to the 2016 PDK poll of the public’s attitudes toward the public schools, 82 percent of Americans believe preparing students to be good citizens is very or extremely important. At the same time, only 33 percent think the public schools in their communities are doing that job very or extremely well.

So what is to be done? Continue reading

In Some States, Pre-K Providers That Have the Money, Keep the Money, and That’s a Problem

Charter schools should offer pre-k. Sometimes they can, and sometimes they can’t. One reason they can’t: Policies in ten states privilege existing pre-k providers. When these states allocate pre-k funding, they allocate funding first to providers that are currently serving children, leaving little — if any — funding for charter schools that aren’t existing providers, which many aren’t. So the providers that have the money, keep the money. Continue reading

Ohio Problems, Ohio Solutions

Ohio-Map

Image from http://undergrad.osu.edu

We recently offered 10 policy recommendations to address the discouraging performance of Ohio’s charter school sector. We think the building blocks of our recommendations (e.g. strengthening the autonomy-accountability bargain, improving authorizing, creating smart incentives) are relevant to all states, and we suspect the specifics of some recommendations might fit the bill in some states.

But our report was written in response to conditions in Ohio. Several provisions in the Buckeye State’s law are unusual, and after more than 15 years of charter experience, Ohio can now see the long-term consequences of many of its policy decisions.

Continue reading

Rural Schools and Education Reform

Here at Bellwether’s great new blog, I’m going to be writing regularly about rural K-12, with special attention to the important developments getting too little attention and the interesting reform work flying under the radar.

rural schoolhouseSome of these posts will be dedicated to fascinating, hot-off-the-presses research from the ROCI Task Force, a joint effort of a group of terrific scholars (led by Paul Hill), Bellwether, and the J.A. and Kathryn Albertson Foundation. Stay tuned for my first installment along these lines: a piece about Hill’s excellent introductory piece to the ROCI work and contemporary rural education reform.

But to get things kicked off, I wanted to offer just a flavor of the big stuff going on in this field. Continue reading