School bus drivers who suffered pay and benefit cuts under the Bloomberg Administration will receive wage boosts via a $42 million grant, ruled the New York City council last week. Their decision stands out as districts across the country struggle to pay for bus service and eye cost cuts like those made by New York’s former mayor.

Pay and benefits for drivers, attendants and other workers was indirectly slashed when the former administration put school bus contracts out to bid. Student transportation costs had risen from $100 million to about $1 billion, CBS reports, and the new contracts would reportedly save about $405 million over five years.

But those savings come at workers’ expense.

The former mayor removed something called an Employee Protection Provision — or EPP — that granted longtime workers seniority and higher pay. Senior workers could expect to make a maximum of about $47,000 while new drivers made around $31,000; now most salaries are about $24,000 according to the New York Times.

When he was public advocate, Bill de Blasio signed a letter in early 2013 pledging to revisit the EPP. Now, the Mayor has proposed a city-funded measure that would subsidize workers who make lower hourly wages and benefits.

Discussing the proposal at a hearing last Tuesday, officials hailed it as a triumph for workers’ rights.

“At the moment when we are trying to improve the quality of life, to increase the minimum wage and to vote for paid sick leave, it is not fair — it is not acceptable — that our hard-working drivers can be deprived of the benefit that they’ve been working so hard to own,” said councilman Mathieu Eugene.

But when it came time to vote on Thursday, several council members expressed concern.

“Remember, the bus companies that lost the bid here lost it because they were willing to pay more money to their workers,” said Daniel Garodnick. “The 16 companies that won the bid were the ones that were willing to cut salaries. We’re now supplementing the salaries of the workers of those wage-cutting businesses. Have we conducted a fair process here?”

Their vote comes as other cash-strapped districts in the U.S. are planning to outsource their contracts like New York.

In Philadelphia, where an $81 million budget deficit is forcing tough decisions, free bus service for high-school students was on the cutting block last week, though officials have since decided not to axe it quite yet. Meanwhile, Princeton City Schools in Ohio outsourced its transportation contracts last spring, and Delaware County’s Springfield District voted to contract out and sell its bus fleet in June.

Faced with the choice of textbooks or school buses, a move like Bloomberg’s is understandable. But contracting with private service providers isn’t always the cost-saver it seems to be. A paper released in 2012 by the Keystone Research Center found that, while contracting out often saves money upfront, it could financially drain public funds over time. Keystone has ties to the labor movement, as Next City has noted before.

The paper looked at more than 20 years of data from Pennsylvania school districts and came to a startling conclusion: “Contracting out significantly increases total costs.”

This is partly specific to the state where data was collected. But Stephen Herzenberg, one of the paper’s authors, says several things tend to be true across the board.

“Companies will start with a low-ball bid,” he says. On top of that, districts sometimes sell their bus fleet.

“That tips the balance in the short run to contracting out, but what we found was that it was a short-term gain for long-term pay,” he says.

Over time, those low-ball offers go up, and because some districts no longer have ownership of their vehicles, they’re at the mercy of the private companies.

And then, he adds, “the promise of privatization in terms of saving money is not realized. You have jobs that are, in some cases, not as good, and you’re not saving any money.”

“At a time when the state is scouring the entire budget for cost savings, in-sourcing school transportation services represents a significant saving opportunity,” the paper concludes.

In New York, workers paid for the districts’ savings. For now, the city will reimburse them, but if Keystone’s findings are any indication, the district could end up paying — in the long term — as well.

Rachel Dovey is an award-winning freelance writer and former USC Annenberg fellow living at the northern tip of California’s Bay Area. She writes about infrastructure, water and climate change and has been published by Bust, Wired, Paste, SF Weekly, the East Bay Express and the North Bay Bohemian

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