Apr. 3—TUPELO — On Friday morning, Tupelo Public School District's Transportation Director Gary Enis stopped by a local gas station to fill up a school bus with diesel fuel.
By the time the pump clicked off, Enis had put more than $400 into the bus — nearly double what it would have been last April.
Until late February, gas prices, stagnating since the onset of the pandemic, had been slowly climbing for months. But the cost of oil spiked suddenly and dramatically after Russia launched its invasion of Ukraine. In mid-March, gas prices hit an all-time national high of $4.17, according to AAA.
Although prices at the pump have plateaued in recent weeks, they remain far higher than they were a year, or even a couple of months, ago. On Friday, AAA reported an average gas price of $3.90 in Mississippi — a 50% increase from the same time in 2021.
This increase in fuel costs doesn't just affect the average resident filling up their cars; it also throws a wrench in governmental operations across Northeast Mississippi, from police patrols and fire departments, to school and city infrastructure projects.
Big yellow gas guzzlers
Tupelo Public School District buses run 75 routes per day to pick up and drop off students, along with any buses used for field trips and other activities.
All those miles on the road add up. The week of Feb. 8, 2021, the district spent $7,328 on fuel carrying kids to and from school. That same week this year cost TPSD $11,159. That's a 52% increase.
March was even more dramatic. The week of March 8, 2021, the district spent $7,603 on fuel. That same time this year, the district spent $15,246 — a 100% increase.
Since the week of Oct. 11, 2021, the weekly cost of the school district's daily transportation has increased by more than 61%.
Rachel Murphree, TPSD's chief financial officer, said the district has built enough money into this fiscal year's budget to cover the excess fuel costs, although school officials are keeping an eye on spending.
To date, rising gas prices haven't forced the district to cancel any field trips or travel for sports.
"Thankfully, we have a very sound fund balance that can take care of us until the economy recovers," Murphree added.
However, Murphree said the district will have to budget significantly more money — likely 50% to 75% more — for fuel during the upcoming 2022-23 school year.
Likewise, the Lee County School District's monthly fuel expenditures have doubled since 2021.
The district spent $9,600 per week on fuel in Feb. 2021, compared to $16,000 in Feb. 2022. That's a 66% increase in a year.
In mid-October 2021, Lee County Schools spent $12,500 on fuel. By the week of March 13, the cost had increased to $17,500, an increase of 40% in about five months.
Michael Martin, LCSD's business manager, said the district budgets expenditures high and revenue low to allow a cushion, especially for fuel prices, since prices are subject to increase.
Budgeted money for fuel that goes unused each year is rolled over to the next, so the district has built up a surplus to carry it through the end of the year.
The district will continue to run its regular 102 bus routes per day, and LCSD Superintendent Coke Magee said fuel prices won't affect any field trips, sports or activity travel for the 2021-22 school year.
Next year, however, could be a different story.
"If we have a full year, next year, at these prices, it could eat into the fund balance a bit more," he said.
From hot mix to patrol cars
Kim Hanna, chief financial officer for the city of Tupelo, said the city was already looking for cost-saving measures in anticipation of additional spending on fuel when gas prices spiked in late February and early March.
With gas prices already climbing even before the sudden surge, Hanna said departments had been trimming the fat from their expenses to make room in their budgets for additional expenditures on fuel.
Still, Hanna expects higher gas prices to hit the city's budget hard, particularly for departments like police, fire, public works and sanitation, all of which require regular travel.
For example, the Tupelo Police Department used roughly 9,000 gallons of gas each month between October 2020 and February 2021. All that travel cost the city's taxpayers an average of $23,423 a month.
Hanna expects that average monthly fuel bill to jump significantly once the department delivers its March report.
Not that there's much that can be done about the amount police officers travel each day, Hanna said. They can't stop patrolling the city.
Still, there are ways police, the fire department and other public works departments could cut costs, and city officials are currently exploring those options.
It's a similar situation outside the city, in Lee County. County Administrator Bill Benson also sees the rising fuel costs as a problem that requires shuffling budgets.
Although Benson said he'd seen some signs that gas prices might rise while he was building this fiscal year's budget, he said there was no way to anticipate just how much the cost would increase.
"It hasn't wrecked budgets yet, but over time it can," Benson said. "We certainly didn't budget for $4 a gallon. We really had no way to predict it. Nobody was expecting (Russia's invasion) on Oct. 1 when we were approving budgets."
Benson said the county sheriff's office and road department see the most regular travel and would therefore be the hardest hit by increased fuel prices.
That impact is already being seen. According to Benson, the Lee County Sheriff's Office spent $177,045 on fuel during the last fiscal year; in the first six months of the current fiscal year, they've spent $111,362 — 63% of what they spent during the entire previous year.
March of last year cost the county $13,307 to fund travel for the sheriff's office. This March was slightly higher — $14,839 — but not nearly as significant as it could have been.
Benson said the full impact of the gas hike would make itself more obvious over the next few months.
But it's not just the cost at the pump that could potentially hurt county and city coffers. Rising fuel costs affect the budgets of nearly every project. Both Benson and Hanna noted that, though projects and contractors have flexible budgets for gas, it will still play a role in how much can be done on existing and future projects.
"Our hot mix bid was $72 a ton last year, and now we are talking about, at a minimum, $20 more," Benson said. "It is not only gasoline, but it is also the asphalt products that are rising."
Wait and see
Though gas prices are an immediate issue, Hanna said the city will not know how much pain the increased fuel cost will inflict until the city's sales tax reimbursements are released later this spring.
"We will have to wait until May before we know the impact of the spike," she said. "We don't want to respond drastically. We will not be making sweeping cuts to our services."
If the spike in fuel prices should cause the city to go over budget, a likely scenario, Hanna said city officials would need to amend the budget and, possibly, adjust their plans.
Lee County School District officials have adopted a similar wait-and-see approach, at least for now.
With the 2021-22 school year nearing its end, Martin is already eyeing next year's budget. But with the district not knowing its 2022-23 school year funding level yet, it's still too early to know how big an issue increased gas prices could prove to be.
"We don't budget $600,000 for fuel every year," Martin said. "If prices are still where they are and aren't projected to go down within the next year, then we're going to have to look at that a lot harder."
blake.alsup@djournal.com
caleb.mccluskey@djournal.com
