News & Insights

Across the nation, numerous school transportation contractors continue to experience the financial strain caused by school closures due to the coronavirus. The sudden elimination of in-person school days during the 2019-2020 and 2020-2021 school years has driven many school districts to refuse to pay their transportation contractors, citing that because no driving occurred, there is no service to pay for. However, even when no driving is performed, transportation contractors continue to provide services, such as the maintenance of fleet and continued payments for equipment, insurance, and rent. Still, school districts continue to argue that they should not pay their contractors, claiming that such payments to the contractors would be an improper use or “a gift of public funds” which is prohibited by state law. This note will explain why the school’s argument against payment on this point is an inaccurate interpretation of state law.

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