As CEO of Pennsylvania-based Krapf Group and president of the National School Transportation Association (NSTA), Blake Krapf has a keen perspective on the state of school bus contracting. Here, he shares insights on NSTA initiatives, the widespread driver shortage, and the recently passed tax reform bill.
1. What are your key initiatives as president of NSTA?
The NSTA board worked together and approved a very aggressive strategic plan in the spring of 2017. There are a lot of different initiatives within our strategic plan. However, the piece I would like to focus on is membership. I think it is important to the long-term success of NSTA that we work to grow our membership, retain all of our current members, and work to engage all of our members so that we can all benefit and improve our industry through our collective years of experience and knowledge.
2. On the national level, what do you see as the top issues for school bus contractors?
Unfortunately, I think the biggest issue facing all of us is the same one that has plagued the industry for a number of years now. I think every school bus contractor I have talked to in the last two years is facing some sort of driver shortage. There are many reasons why we continue to face this issue, but one of the things we can do as an industry is to work together to raise the image of a school bus driver. Most people don’t realize the amount of training, background checks, and scrutiny that someone has to go through to become a school bus driver. School bus drivers do a tremendous job every day under sometimes very difficult circumstances, and as an industry we need to do a better job telling these stories and promoting the excellent job that school bus drivers do on a daily basis.
3. What’s your take on how the tax reform bill will impact school bus contractors?
I am taking a very conservative point of view on the impact to the tax reform bill on school bus contractors. Many of the school bus contractors are small family-owned businesses that are created as pass-through entities. The tax reform bill does not provide significant opportunities for pass-through entities. The bulk of the legislation provides a significant tax reduction to large corporations with a reduction in the corporate net income rate. The tax reform bill does allow for the immediate expensing of capital assets, which will improve near-term cash flow and defer income taxes. Hopefully, with the reduction in the corporate income tax rate, it will generate opportunities to reinvest in the economy.
4. What are the top issues in Pennsylvania right now?
In addition to the driver shortage, in Pennsylvania we continue to face a potential funding crisis. This past year, our state association (the Pennsylvania School Bus Association) did an excellent job working with our elected officials to maintain the same level of funding for school bus services throughout the commonwealth of Pennsylvania. The original draft of the state budget called for a $50 million reduction in funding for school bus services. Through the efforts of the members and leadership of PSBA, we were able to restore the funding to the same level as the prior year. Unfortunately, I believe there will continue to be a struggle for funds, as the state is projected to have another difficult budget cycle.
5. What are you most looking forward to in 2018?
NSTA has the opportunity to work with Congress to help bring regulatory reform to our industry. Congressman Scott Perry (R-Penn.) introduced the Buses United for Safety, Regulatory Reform, and Enhanced Growth for the 21st Century Act (BUSREGS-21 — HR 2120). BUSREGS-21 is a comprehensive bill designed to bring about essential regulatory reform and modernization of regulations that will result in improved safety, expanded investments, and job creation for the private school bus industry. This important legislation would:
• Evaluate whether existing regulations applicable to buses are achieving their projected goals.
• Modernize and streamline federal motor carrier safety and vehicle safety regulations for the bus industry, including rescission of some unnecessary regulations that do not improve safety.
• Provide additional due process protections for bus operators cited for federal violations.
• Speed up the approval process for new bus operators desiring to enter the industry.
• Ensure that regulations written to apply to both trucks and buses are fully evaluated for their appropriateness to bus operations.
• Provide stronger accountability for federally funded public transit agencies to ensure they are meeting existing requirements to encourage the participation of the private sector.
• Create an incentive program for public transit agencies that partner with the private sector.