Electric School Bus Grants Cut by Trump, Valley Districts May Suffer

As the new federal fiscal year begins, school districts across the country have seen the end of a tax credit they had been using to convert their bus fleets to electric.

The Inflation Reduction Act of the Biden era, which set aside funds for clean energy vehicles including electric school buses, was expected to end only in 2032. However, the recent One Big Beautiful Bill Act concluded these tax credits as of the end of September.

According to the Electric School Bus Initiative, close to 230 electric school buses were committed in Arizona’s districts, yet only 49 have been either delivered or are currently in operation.

Now that the tax credit has ended, both in Arizona and across the nation, these figures may not see much growth.

Tax Credit Conversation

Julia Gentin, a journalist who covers climate education at The Hechinger Report, discussed the current situation of states, districts, and schools that were anticipating the conversion of their bus fleets to electric.

Julia explains, “Schools were expecting to have this tax credit for electric vehicles for the next seven years under the Biden-era Inflation Reduction Act. However, the One Big Beautiful Bill Act, or H.R. 1, has stipulated that any electric vehicle acquired after September 30, 2025, will not be eligible for tax credits.”

She expresses her concern that the end of this tax credit will likely reduce the number of electric school buses on the roads across the country. Schools that had planned long-term additions of electric school buses will no longer receive the tax credit if they were not purchased by September 30.

The impact of losing these tax credits could be about $40,000 per vehicle. This would make it challenging for districts that were considering these buses in their long-term net-zero energy resolutions. They would not be able to rely on funding from the federal government.

Julia also shared her conversation with the Los Angeles Unified School District. The district was initially worried as they had already ordered these buses and were expecting to have 30% of the costs covered by the Inflation Reduction Act-era tax credits. However, a rewording in the law has assured districts that as long as they have ordered the bus, they will still receive the tax credit.

The Impact of Losing Tax Credits

Julia further explains the potential effects of the loss of this tax credit. She says, “The loss could impact around $40,000 per vehicle. With more than half a million buses transporting 21 million kids to schools, there are environmental implications associated with diesel- or fossil-fueled buses.”

She adds that while districts and advocates are hopeful of finding other funding sources to fill this gap, it will likely delay many of the electrification processes. She fears that the majority of diesel school buses will continue operating.

With programs like the Environmental Protection Agency’s Clean School Bus Program expiring in two years, districts may have to look for local or state sources of funding. However, some states may be more fortunate than others in terms of available resources.