Analysis: Who should be responsible for funding school buses in Irvine? By Jay Bruce
The Irvine City Council unanimously voted to continue subsidizing two routes for the school district’s University High School bus program as part of its June 23 budget review. But as councilmembers discussed cuts to mitigate projected deficits, some raised questions as to whether the city should be financially responsible for the program long-term.
The school buses serve Quail Hill and adjacent areas that are around 3 or more miles away from University High School, their assigned school. Since the program began in the 2023-24 school year, the City Council has voted annually to cover about 75% of the program’s cost due to an IUSD administrative regulation preventing the district from providing optional busing unless cost-neutral. Parents pay for the remaining cost through bus passes.
Prior to the review, the city’s advisory Finance Commission unanimously recommended that the city split the program’s cost with the district. But due to district policy, any lapse in City Council funding would have to be covered by parents, which would have raised bus fees to $2,880 per rider annually according to IUSD transportation administrator Jennifer Payton.
Although councilmembers supported the program, many of them said the district should have offered funds as well.
“It’s kind of remarkable, with all of the resources that this city, unlike other cities, commits to the school district to help support our school system and our school children, that we would get what amounts to a stiff arm on a reasonable request,” Mayor Larry Agran said at the meeting.
“I also know that IUSD has unrestricted general fund of $50 million to $75 million,” Vice Mayor James Mai said at the meeting. “There is money at IUSD to help us with this, and it should be in consideration.”
However, the reason that the almost $300,000 program needs around $220,000 of city funding involves overlapping responsibilities and funding shortfalls ranging from the state to local levels of government.
The state’s responsibility
School districts, unlike cities, rely primarily on the state for funding. IUSD, which receives 95% of its budget from the state, has long been affected by low levels of home-to-school transportation funding from the state.
According to the state Legislative Analyst’s Office, the state began reimbursing districts for anywhere between 50% to 90% of their home-to-school transportation costs in 1947. However, in response to the passage of Proposition 13 in 1978 capping property taxes, the state froze funding for the 1981-82 fiscal year at prior-year levels. This caused many California school districts like IUSD to cut busing in the 1980s, as state funding could only increase with occasional cost-of-living adjustments regardless of rising costs or enrollment.
The IUSD Board of Education followed this trend and approved its policy requiring cost neutrality for most general education transportation, Administrative Regulation 3540.1, in 1989. The district kept only six general education routes and began prioritizing the rest of its state funding for special education transportation that the district is required by law to provide for free.
The state began guaranteeing funding for at least 60% of districts’ home-to-school transportation costs in the 2022-23 fiscal year, meaning an additional $3.5 million per year for IUSD. However, the district’s transportation contract with Durham School Services, which had previously been under a rate cap, increased after a rebid from $6 million in 2024 to $12 million in 2025 and $15.5 million in 2026. According to Payton, these rising costs have left no room in state support for additional routes.
“Even though we do get more money from the state, it’s like chasing this light you just can’t get,” Payton said in a 2025 interview to The Northwood Howler. “Like, yeah, we got more money. And it costs us more and more and more, and we’re using more and more out of the General Fund to make it whole, just so we can provide all the services needed.”
For example, between IUSD’s 2024-25 and 2025-26 transportation plans, state funding for transportation increased by $3,886,165. However, the district still had to use all of it and increase its General Fund contribution by $2,619,954 to cover the increased contract cost. In total, the district allocated $7,208,733, or about 1.3%, of its General Fund toward transportation in 2025-26.
IUSD’s responsibility
Furthermore, IUSD’s ability to contribute to home-to-school transportation from its own discretionary General Fund is also limited beyond just AR 3540.1.
IUSD had an unrestricted General Fund of $539.7 million in 2025-26 compared to the city’s $298 million. However, 89% of IUSD’s unrestricted General Fund in 2025-26 was budgeted for salaries and benefits, compared to the city’s 66%. Especially with strong teachers unions in California, this allocation is difficult to lower compared to other General Fund categories, leaving the city with more discretionary funding to spend on services.
Because of this, John Fogarty, IUSD assistant superintendent of business services, said in a 2025 email that “any augmentation the district would make to fund transportation locally would come at the expense of our existing programs.”
IUSD’s 2026-27 budget update, however, included an additional $21.3 million in unallocated, unrestricted dollars in ongoing funding from the state. Fogarty said at the June 23 Board of Education meeting that, even with future revenue volatility, “we haven’t had a number that big in a while, so this is a very strong budget.”
Though the district identified other educational priorities, continued revenue growth could provide the Board of Education a stable enough position to eventually consider General Fund support to the University High School program.
The city’s responsibility
The University High School bus program began in 2023 as a $75,000 one-route pilot for 50 Quail Hill riders. Parents initially discussed a program with IUSD staff but, unable to cover the full cost themselves, successfully advocated for the City Council to contribute $55,000 and bring the first year’s individual cost from $1,500 to $450 per rider.
“If you don’t have to spend an hour in the car in the morning everyday and in the afternoon, too, then you can stay at work or you can go for a walk for a morning,” Ayn Craciun, climate activist and former city Sustainability Commissioner, said to The Northwood Howler in 2025. “So much more freedom, and it’s really economic justice. Especially for women because, a lot of times, it’s the women who end up doing that work.”
Many councilmembers have supported the use of city funding for the program as necessary.
“It was ultimately the decision of Irvine Unified School District to zone it that way, although the city bears responsibility to the extent that we don’t really have a through street,” Councilmember Mike Carroll said at the June 23 meeting. “It’s the only place in the entire city where parents and kids have to get on a freeway to get over to their high school.”
As such, the City Council has since annually reapproved funding. For the 2024-25 school year, the City Council approved $110,000 from the city’s discretionary General Fund through the budget for the City Manager’s Office. It later approved another $110,000 to add a second route by lowering the city’s Contingency Reserve.
According to city budget administrator Jonathan Nih, funding for the program was then included in the city’s 2025-27 Biennial Budget. This comprised $220,000 for the 2025-26 school year from the city’s non-departmental General Fund and $218,552 for the 2026-27 school year from the Asset Management Plan fund, a one-time funding source which typically acts like an endowment the city earns interest on.
The city used one-time funding to pay for 2026-27 because the city still considers the program a pilot and has not committed to future funding. The program still lacks an ongoing General Fund source.
Now facing deficits, the city finds itself having enabled the creation of the University High School bus program and still unanimously supporting it, while now lacking the financial flexibility in its General Fund to guarantee its permanence.
Long-term considerations
Financial responsibility for the program should ultimately be mutually agreeable to the city and district. The city initiated the program with no expectation of district support. But with the City Council’s current uncertainty, the Board of Education should weigh both state funding levels and the program’s benefit to University High School families and consider if the two routes warrant the same support it provides to the nine other general education routes.
Scenario 1: Establishing, or joining, an ongoing city funding source
The city provides $2 million annually to IUSD through its Educational Partnership Fund program, which is used for school nurses, guidance counselors, instructional aides and custodians. The city could amend this agreement to allow for, or require its contribution of school transportation to be given through, these grants. The city or district would then have to decide if and how to cover the staffing costs currently covered by the grants.
The city also received a $4,471,421 grant from the Orange County Transportation Authority in 2024 as part of the county’s Community Based Transit Circulators Program, which distributes money for local shuttles from the Measure M2 countywide sales tax. As described in the city’s grant application, the city proposed five services for “limited periods throughout the year in support of daily travel needs and recurring special events.”
One of the initially proposed circulators was a “Village Connector” between Los Olivos, Hidden Canyon, Laguna Altura, Quail Hill, Turtle Rock and University High School at an estimated cost of $595,820 over seven years. The grant would have covered 89% of the cost, while 11%, part of the matching funds required by the county, would have been sourced from a rider fee.
Most of the spent money has gone toward shuttles for major special events like Irvine Global Village and CicloIrvine. But not all funding has been used. Calls for adding a school bus to Northwood High School largely ceased after the city extended the Irvine CONNECT bus route to the school in July 2025. The same kind of solution could be applied with a city-run shuttle with limited service times funded by this grant.
Scenario 2: Board-directed district General Fund support
The Board of Education has not reviewed AR 3540.1 since 2003, nor did it review the Finance Commission’s recommendation to split the University High School bus program’s cost with the city. If the City Council lowers its subsidy, or the district’s General Fund or the state’s home-to-school transportation allocation grows, there are hypothetically three ways the district could fulfill that recommendation.
Even after the passage of AR 3540.1, the district added three general education routes for Plaza Vista K-8 School and Oak Creek Elementary School. They currently maintain cost neutrality by being funded entirely by bus passes and the state’s home-to-school transportation allocation.
However, the addition of these routes technically took part of that allocation away from special education transportation, which now, by legal obligation, must be covered by the General Fund—creating a sort of delayed General Fund expenditure. Extending this principle, the board could theoretically reallocate more of the district’s state allocation toward the University High School bus program, and then use General Fund money to fill the hole in special education transportation funding left by that reallocated state allocation.
But more broadly, there is not actually any prohibition from spending General Fund money on general education transportation in the first place. General Fund money was indeed spent for that purpose in the 2021-22 budget.
This is because AR 3540.1, after defining non-transportation zones around schools, establishes that general education transportation “beyond the non-transportation zone, for a given school, may be provided where there is sufficient paying ridership to operate a bus on a cost-neutral basis, or where significant safety concerns are present.” It could be argued that the use of “or” in the final phrase removes the cost neutrality requirement for routes based on “significant safety concerns.”
The board could use this interpretation to argue for safety concerns at Quail Hill and provide General Fund money directly to the University High School bus program. It could also simply revise AR 3540.1 to more clearly allow the use of General Fund money for these routes.
Lastly, IUSD maintains six general education routes to Turtle Rock Elementary School, most of which serve students within the school’s non-transportation zone. According to the district, this is because these routes were carried over from before the approval of AR 3540.1. The board could consider phasing out support for this program and reallocating its funding for University High School, or revising AR 3540.1 to allow for explicit exceptions to the non-transportation zones.
University High School bus pass applications will open July 8 at 10 a.m., with the fee increasing from $700 to $720 to address rising contract costs. The city will discuss long-term budget balancing measures at its Aug. 3 special meeting.
This article includes some information originally reported by the author in “IUSD Board of Education approves 2024-2025 Transportation Plan,” published by The Northwood Howler, Northwood High School’s official school newspaper.
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