North Carolina seeks $40 million to help schools cover rising fuel costs

Transportation spending for school districts has nearly doubled this school year as diesel prices have reached record highs. Now, the North Carolina Department of Public Instruction is asking lawmakers for a one-time $40 million fund to help districts cover the additional costs.

Between August and the beginning of October, school districts in the state spent $17.1 million on 3.8 million gallons of diesel fuel. That’s nearly double the $8.6 million they spent for 3.6 million gallons during the same period last school year, according to data DPI presented to the State Board of Education on Wednesday. Districts also spent $8.6 million on 3.7 million gallons during the same period in the 2024-25 school year.

“We were seeing that school districts are spending about twice as much on fuel in the first couple of months of the school year as they were in the previous two school years, even though they bought the same amount of gallons,” Geoff Coltrane, DPI’s senior director of government affairs and strategy, told board members. 

The money would help districts cover fuel costs above the roughly $3 per gallon included in their transportation funding allocation. It would be distributed to school districts and charter schools based on need, Coltrane said.

Diesel prices in North Carolina hit a record average of more than $6 per gallon earlier this fall, putting so much pressure on school transportation budgets that some district leaders said they may be forced to make cuts elsewhere or use money from their reserves.

NC Gov Stein signs gas tax holiday into law

Last month, the General Assembly suspended the state’s motor fuel tax, including the tax on diesel, through Nov. 30. But the suspension doesn’t help school districts because they’re already exempt from fuel taxes.

The department has already begun sharing the request with lawmakers and legislative staff, Coltrane said. DPI did not provide an estimate of how much individual districts could receive.

Democrats won control of the state House in Tuesday’s midterm elections for the first time since 2010, while Republicans retained a narrow majority in the Senate.

The proposal was part of a broader package of budget priorities DPI presented to the State Board of Education. The department plans to submit its recommendations to the state budget office by early January for consideration in the governor’s budget.

Among the other requests, DPI is seeking $300 million in each year of the two-year budget to help school districts buy new literacy and math instructional materials aligned with recently adopted standards. The department is also asking for $115 million to help districts replace student devices, after a report found that many districts don’t have enough money to replace them.

DPI is also seeking $117 million to increase funding for needs-based school construction grants, and another $25 million for school repairs and renovations. The department wants to increase funding for school health personnel by 20%, which it estimates could help districts hire about 700 additional counselors, nurses, social workers and psychologists.