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Dive Brief:
- Rising diesel prices are exceeding school districts’ fixed budgets this school year, according to a survey conducted in May by AASA, The School Superintendents Association, the Association of School Business Officials International and the National Association for Pupil Transportation.
- When comparing their approved final budgets for diesel in the 2025-26 school year to their actual diesel costs, 22% of district respondents reported actual diesel costs were 11-20% over budget, 20% said the actual cost was 6-10% over budget, and 14% said costs ran 20% over budget.
- To navigate rising diesel prices in 2025-26, 63% of districts said they’re taking on the extra costs within their current transportation budget, and 32% are transferring funds from other district programs. If diesel costs are still high, some districts expect to make further budget cuts in the 2026-27 school year.
Dive Insight:
Because districts are required to provide transportation for students to get to school, AASA Chief Advocacy and Governance Officer Noelle Ellerson Ng wrote in a Monday blog post that these increasing diesel costs are causing “a very real-time impact on budgets.”
As of Monday, the average price of diesel in the U.S. was $5.60 per gallon, according to the U.S. Energy Information Administration. That’s $2.06 higher than it was one year ago, and $1.88 more costly than in February 2026 — when the Iran war began and has since driven up global oil prices.
So far, the survey found, districts have largely avoided making budget cuts that would impact classrooms due to rising diesel costs.
Less than 5% of districts reported that they’ve had to offset diesel costs in the 2025-26 school year by reducing instructional staff, increasing class sizes, delaying instructional improvement initiatives, cutting extracurricular programs or cutting funds for instructional materials. However, 16% reported deferring maintenance or facilities work, 13% reduced support personnel, another 13% cut administrative spending and staffing, and 12% scaled back summer instruction.
Another 19% said they’re using district reserves to cover the additional costs this school year, while 15% have yet to find alternative ways to cover the rising costs.
The most common strategy districts have taken in the 2025-26 school year to account for rising diesel costs is to consolidate bus routes or adjust route efficiency. Other efforts include enforcing anti-idling measures, decreasing the number of routes, limiting non-required transportation like field trips, changing fuel purchasing practices, increasing walk-to-stop ratios, and moving toward non-diesel vehicles. Some districts also negotiated contracts with transportation vendors.
For the 2026-27 school year, 37% of districts also said they expect to see reductions in their reserve funds if diesel prices remain high. Some 36% said they were unsure of how future budget cuts could take shape.
Likely areas for cuts could include: facility maintenance deferrals (29%), extracurricular and athletic activities (30%), non-instructional staffing (23%), professional development and consulting services (22%), technology purchases and replacements (22%), supplies and textbooks (14%), and instructional staffing and programming (6%).
Looking ahead to 2026-27, more than half of districts have not planned for any budget cuts driven by rising diesel costs. A third of respondents said they added a contingency plan in their budgets for fuel volatility next school year, and 16% renegotiated contracts or adjusted terms with vendors. Some 10% also requested more transportation funds from local and state revenue.
The strain diesel prices are putting on district budgets comes as many school leaders are already grappling with decreasing revenue due to dropping enrollment.
District leaders commonly cite low birthrates, growing school choice policies, higher costs of living, and tighter federal immigration policies and enforcement for enrollment declines. Because of this trend, some districts have had to permanently close or consolidate schools, implement hiring freezes or send layoff notices to staff.
The survey by AASA, ASBO and NAPT collected 188 responses during the week of May 4. Two-thirds of respondents were a transportation director or coordinator, while 16% were school business officials, and 12% were superintendents.
