As diesel prices soar, school district transportation budgets are paying the price

Suburban school districts — especially those that operate their own bus fleets — have been among those hardest hit by record-high diesel prices this fall.

Global supply concerns caused by the wars in Iran and Ukraine and a Sept. 13 power outage at the ExxonMobil refinery in Joliet saw diesel prices in Illinois skyrocket to a record average of $6.83 per gallon on Sept. 23, according to AAA. The per-gallon price of diesel is down to $6.58 as of Thursday.

Naperville Unit District 203, which operates a fleet that includes more than 120 diesel-fueled school buses to serve its roughly 16,000 students, is feeling the strain.

Lisa Xagas, District 203’s assistant superintendent of strategy and engagement, said officials anticipate spending an extra $300,000 on fuel alone during the 2026-27 school year if diesel prices hold. The additional cost would have been even higher had the district not optimized its bus routes this spring, which saved an estimated 900 miles per day, she noted.

“Right now we are in the phase where we are watching the price of diesel closely and analyzing the impact,” Xagas said. “We have not talked about not having field trips or not having transportation services for events, and we hope that we don’t get to that point.”

Naperville 203 allocated $15.6 million to transportation in its 2026-27 budget, roughly 4.2% of its overall budget of more than $370 million. Yet, even a $300,000 increase is cause for concern, especially as the district is facing a budget deficit of $3.9 million, caused in part by declining enrollment.

The district has reserve funding that could cover the increase in the short term. However, Xagas noted there will be some tough decisions to make during the 2027-28 budget process, which begins in April, if the price of diesel remains elevated.

The district does not have plans to purchase additional nondiesel school buses. Xagas said they are still waiting on an order of electric buses placed more than a year ago.

Elgin Area School District U-46, which serves more than 33,000 students across 11 communities and has 331 diesel-powered buses in its fleet, is in a similar analysis phase as officials there wait to see if diesel prices will stabilize.

The district has allocated $2.6 million toward fuel expenses for the 2027 fiscal year. A U-46 spokeswoman said the district has not yet produced an estimate as to how the spike in the price of diesel will impact that budget.

Marcy Murphy, U-46’s director of transportation, said the district is continuing to evaluate its options, including “alternative-fuel technologies such as electric and natural-gas buses.”

Palatine-Schaumburg Township High School District 211, which serves nearly 9,000 students across Hoffman Estates, Palatine and Schaumburg, began shifting from diesel to propane ahead of the 2018-19 school year. Its fleet of about 200 vehicles now includes 80 propane-fueled school buses.

District 211 Chief Operating Officer Lauren Hummel said the district is paying on average $1.15 to $1.40 per gallon for propane, more than $5 less per gallon than it would be paying for diesel.

“The propane prices that we’re paying have really worked to our advantage in the total spend that we have (on fuel) in a fiscal year,” she said.

Hummel cited numerous other benefits of propane buses over diesel, including increased reliability in extreme cold weather and reduced noise.

District 211 evaluated a switch to electric buses but ultimately opted to go for propane due to what Hummel described as substantially larger upfront and maintenance costs of an electric bus and reliability concerns in cold weather.

According to a 2019 market study from Atlas Public Policy, published less than a year after District 211 made its independent evaluation, the estimated market rate cost for a new propane bus was between $110,000 and $115,000, compared with the $300,000 to $440,000 price tag for a new electric bus.

St. Charles Community Unit District 303, which serves nearly 12,000 students, began to shift away from diesel to gasoline-powered buses around the same time frame as District 211’s switch. District 303 now has just 12 operational diesel buses in its fleet, about 10% of the total.

Director of Transportation Deborah Mason said District 303 is still making minor changes in response to rising costs of diesel, including not using diesel-fueled buses for longer trips.

If the price of diesel remains high, the district may delay some nonessential transportation expenses to a different fiscal year — including equipment replacement and the implementation of integrated seating for prekindergarten students.

“It’s those things that do not impact the quality of service, the level of safety that each school bus location should have,” Mason said.

Susan Mudd, who directs the Diesel Pollution Reduction Initiative at the Environmental Law & Policy Center, said she generally encourages districts to shift to electric over diesel — in consideration of both affordability and environmental impact.

According to Mudd, propane is better than diesel on most air pollutants, but it is “far worse” on carbon monoxide. She acknowledges the higher upfront cost of electric buses, but argues that long-term fuel savings can help close the gap, especially when districts receive assistance from government-backed energy transition programs

The Environmental Protection Agency’s Clean School Bus Program has awarded $2.6 billion to help more than 1,100 school districts replace buses with lower-emission alternatives since 2021, according to data from the ELPC.

Mudd said she also has seen ComEd’s Energy Affordability Program assist in some districts’ transition to electric buses through rebates directed toward infrastructure costs.

Hummel’s District 211 has received a number of federal grants that have assisted its efforts to transition to propane, including from the EPA’s Clean School Bus Program.

However, for Naperville 203, a lack of state funding has compounded the financial pressure from rising diesel prices.

State law requires that the Illinois State Board of Education reimburse districts 80% of their fuel expenses. However, the law contains a provision for reducing the reimbursement rate proportionally by district if the amount the General Assembly appropriates for transportation is insufficient to fund total claims — which has been the case for Naperville 203 over the last five years.

The district reports it received $2.3 million less in the 2026 fiscal year — and more than $8.4 million less in total — from the state than the 80% reimbursement requirement.

Xagas said Naperville 203 is advocating for the state to appropriate additional funds to cover rising fuel costs, but doesn’t believe “there has been any kind of formal progress at this point.”

Patrick De Haan, head of petroleum analysis for the fuel-cost tracking website GasBuddy, said diesel prices may decline slightly in the next few weeks with the Joliet ExxonMobil plant resuming operations. Per-gallon diesel prices have dropped more than 25 cents a gallon since Sept. 23.

Customers may have to wait longer for a more substantial decline.

“Whether or not there is going to be relief (in the next six months) is impossible to tell,” De Haan said. “A lot of that is a function of the continued evolution in the situation between the U.S. and Ukraine, and the U.S. and Iran. If we see some improvement in tensions there, then we could see some relief.”

hhorowitz@dailyherald.com