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November 01, 2003  |   Comments (0)   |   Post a comment

Is that prosperity I see on the horizon?

Is that prosperity I see on the horizon?

by Frank Di Giacomo, Publisher


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Belt-tightening has become a way of life for those of you involved in pupil transportation. According to our annual school district survey (see story beginning on pg. 47), nearly two-thirds of the respondents said they had reduced their department overhead recently. An even greater percentage of respondents (68.3 percent) rated their budget concerns for the 2003-04 school year as "moderate," "severe" or "desperate."

Everyone has been patiently waiting for an economic recovery to appear on the horizon, but the downturn has persisted longer than expected, pressuring school districts and other public agencies to find new revenue sources and to pinch every penny that can be found in already-tight budgets.

Some of the cost-cutting methods reported by the survey respondents sound painful, such as trimming staff, reducing service and postponing the purchase of new buses and shop equipment. In other cases, dialing down costs actually had a positive ring: streamlining routes, encouraging drivers to reduce their bus idling and finding ways to procure fuel more cheaply.

Stay focused on efficiency. . .
When the economy fully recovers, we need to remember that efficiency should always be a key objective, as long as safety is not compromised. Over the past few years, "doing more with less" has become routine for school bus operations. It should remain standard operating procedure long after the economy returns to its former glory.

I don’t expect we’ll have to wait long. Like you, I’ve been following media reports on the economy, and it sounds like we’re on the brink of recovery.

Reinforcing this notion is James F. Smith, a professor of finance at the University of North Carolina. Smith spoke at a conference for the American Public Transportation Association that I recently attended and sounded a note of high optimism.

Smith basically said prosperity is right around the corner. In fact, he believes that the next couple of years will be the best in the past 20 years.

On what does the professor base his optimism? Smith says the upcoming 2004 presidential election is a key factor. Because many Americans vote with their pocketbooks, President Bush understands that the economy will play a huge role in his success or failure. "They must feel much better off financially than they do right now," Smith says.

Smith believes that Bush’s tax reductions in 2001 and 2003 will increase real disposable income per capita — just in time for next year’s November election. He also believes that the U.S. economy will create 2 million to 3 million new jobs over the next year or so and that energy prices will decline once Iraq gets its oil production back in line with its capacity. "There are plenty of things to worry about in the world, but the health and robustness of the economy are not among them," Smith said.

. . . but invest in the future
I agree that good times are ahead. I think you probably do, too. But as I said earlier, we need to maintain the efficiencies that have, in many cases, been forced upon us. That doesn’t mean, however, that we should not invest in the future, especially where safety is concerned.

When funding for your school district returns to a more normal level, don’t be afraid to ask for increases in your operating and capital budgets. If you’re understaffed, lobby for more personnel; if your fleet has buses that should be retired, request funding for new buses. Safety should always be atop your list.


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