Capital Transportation Aid
(2022-23 Estimated Total = $121.0 Million)
Q. How is Capital Transportation Aid calculated?
Chapter 57 of the Laws of 2004 established a new method of apportioning Transportation Capital Aid. Prior to this change, State Aid partially reimbursed districts for their actual approved debt service expenditures for approved buses based on the actual amortization schedules associated with their borrowings. Districts also were partially reimbursed for actual base year transportation equipment, lease and garage rental expenditures. Now aid on all types of transportation capital expenditures are paid based on assumed amortization schedules using a statewide average interest rate. Aidable transportation capital expenditures include the assumed aidable debt service associated with the approved cost of buses, bus/garage leases and transportation equipment purchases:
Assumed debt service expenditures associated with the approved cost of buses and bus/garage leases:
Aidable debt service expenditures for approved buses and leases is based on assumed amortization schedules that begin 12 months after the purchase order date or lease begin date, respectively. For each bus or lease, an assumed amortization schedule is generated based on:- The approved cost of each bus, or in the case of leases, the total lease amount approved by the Office of Educational Management Services
- A statewide average interest rate calculated using the principal and interest payments for all bonds and BANS issued in the year prior to the aid year; e.g., assumed amortizations beginning in the 2023-24 aid year will be based on interest rates for bus borrowings issued between 7/1/2022 and 6/30/2023; Click here for more information on and a mathematical explanation of the statewide average interest rate.
- A term of 5 years for non-Zero Emission Buses (ZEB) buses and 12 years for ZEB buses.
- Equal semiannual assumed payments of principal and interest. For example, 2023-24 assumed debt service for a bus with a PO date between 7/1/21 and 12/31/21 will be based on two assumed payments of principal and interest; assumed debt service for a bus purchased between 1/1/22 and 6/30/22 will be based on one assumed payment of principal and interest. Although there are two assumed payments per year for purposes of establishing an assumed amortization schedule, actual Transportation Aid paid on bus purchases/leases is part of regular Transportation Aid and is paid to districts as part of the 3609-a General Aid payment schedule.
An assumed amortization schedule for a bus purchase or lease is not generated, and aid does not begin to be paid on bus purchase or bus lease, until 12 months after the purchase order date or lease begin date.
Assumed debt service expenditures associated with transportation equipment purchases:
Assumed amortization schedules for transportation equipment purchases are the same as those for bus purchases/leases, except that all assumed debt service expenditures for an aid year will be based on two equal semiannual payments of principal and interest, regardless of the actual purchase date of the equipment. In other words, the purchase order date for all equipment purchased in a given school year is assumed to be July 1 of the school year. The amortization of the equipment purchase amount will begin one year later.
Once aidable assumed debt service is determined, aid is calculated by multiplying aidable expenditures by the district’s selected transportation aid ratio for the current aid year.
Q. What happens if a district sells a bus or receives insurance proceeds? Where should the revenue be reported?
When a bus is sold, the district must recognize the proceeds. The revenue from the sale of a bus that is receiving or has received aid can be reported on the ST-3, Schedule A3, account A2666 – ‘Sale of Transportation Equipment’. Revenue reported in ‘Sale of Transportation Equipment’ will carry forward to the Transportation Aid Output Report (TRA), and/or the Transportation Aid Output Report Estimated (TRAEST), as ‘Receipt from Sale of Transportation Equipment’ and reduce the aidable district operating expenditures.
When insurance proceeds are received, commonly due to an accident, the revenue amount can be reported on the ST-3, Schedule A3, account A2680 – ‘Insurance Recoveries - Transportation Related’ in the school year received. Any anticipated insurance proceeds can be reported in the same line for the projected school year and also reported on Form FT, line 148 – ‘Estimated Revenues for Insurance Recovery in the Capital Fund’. The revenue reported in A2680 and Form FT will carry forward to the Transportation Aid Output Report (TRA), and/or the Transportation Aid Output Report Estimated (TRAEST) as ‘Receipt of Insurance Recovery’ and reduce the aidable district operating expenditures.
Webpage Reviewed by IGH, February, 2023