Advertising on Public
School Buses
Who Really Benefits?
GREY CROFTS
ETHICS AT WORK
Crofts 1
INTRODUCTION
In the 2010-11 Utah State legislative sessions, Jim Bird (Rep. Jim Bird, R-West Jordan) proposed HB 199.
In March of 2011, Governor Herbert signed off on this bill that allows space for commercial advertising
on the outside of public school buses. Multiple states around the nation have actively engaged in this
new form of revenue production. These states include: Massachusetts, Arizona, Texas, Colorado,
Tennessee, and New Jersey. This has created revenue for state and local schools that are receiving
insufficient funds through taxes.
If education, through the will of the people, doesn’t create sufficient funding through taxes, then that is
the state of our education system. However, allowing school boards to operate their own private
enterprises in commercial advertising to manage budget shortfalls is clearly outside the scope of
managing education.
In this paper, I will explore some positions and issues associated with advertising on public school buses,
in particular, whether or not our government, and specifically school boards, should be engaged in
generating revenue as if they were a private enterprise. By entering into the ‘free market’, and having
the opportunity to create revenue for themselves outside of its tax base, school boards have found
themselves in a very precarious position.
History shows us again and again that government’s attempts to produce revenue directly from the
economy by means of ‘setting up shop’, rather than operating within its tax base, always result in
failure.
Additionally, this type of activity is a blatant slap in the face to those industries and services that
compete within these markets. It presents a form of unfair competition; competition, ironically, is our
government’s responsibility to regulate. This endeavor is fraught with ethical issues and negative
implications:
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First Amendment rights of potential advertisers
Government’s direct participation in private enterprise
Unfair competition
Traditional role of government
FINDINGS
The Apparent Need
Tens of millions of dollars are being cut from state education budgets nationwide. As school budgets are
diminishing and programs are being dropped, school districts are seeking new ways to meet the
demands of the parents and also maintain programs for the children.
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“School boards are facing enormous pressure to maintain standards and services with significantly less
financial resources,” said New Jersey legislator Scott Rudder (R-Burlington), who testified at the New
Jersey Assembly Education Committee hearing. “This legislation will provide school districts with an
opportunity to derive revenues from a new source and help to offset the impact of reduced state aid.
The bottom line is that taxpayers will benefit from this proposal” (McGair, 2010). His cohort, Dawn
Marie Addiego (R-Burlington) suggests that “this is the kind of innovative legislation we need as we
continue to deal with our state’s fiscal crisis. It has the potential to be a great revenue source and will
benefit students as well as taxpayers at a time when funding is very tight and several schools have
experienced program cuts” (2010).
Faced with unprecedented budget shortfalls, many states are considering overturning long-standing
laws that prohibit advertising on school buses (Blaiz, 2011). And, although these prohibitions were
based primarily on safety issues, there are myriad conditions that immediately come to the surface
when public entities begin to endeavor in such practices.
In addition to selling commercial space on its public school buses, Arizona has taken it several steps
further. In September, 2009 Arizona legislators began selling off significant state assets in an effort to
manage a $3.2 billion revenue shortfall. In addition to putting their state’s legislative office building on
the market ($40 million), they have also put state prisons, historical societies, and state parks up for
sale. Selling a building that the owner wishes to continue to occupy – known as a ‘sale and lease back’ –
is like renting to own new furniture, except the state already owns the furniture (Steinhauer, 2009).
Colorado Springs School District 11 may have been the first in the nation to advertise on its buses when
it started 14 years ago, says spokeswoman Elaine Naleski. "District 11 was in what I would call a financial
crisis," she says. "They couldn't pass a bond or any kind of tax increase" (Bazar, 2005).
The need for adequate funding for our education system, and the subsequent initiatives that are
employed, are at the heart of what school boards face nationwide. The Utah Board of Education,
operating under the provisions provided to it in the Utah State Constitution, has the authority to make
‘emergency’ rules if board members deem that delayed action will ‘cause an imminent budget reduction
because of budget constraints’. The Utah School Boards Association, in its ‘Belief Statement’, suggests
that “public education’s success depends on public support” and that “a sustained financial commitment
is essential”. Necessary tax revenue (public support for education) and financial commitment (adequate
budgeting in the legislature) are necessary for their mission. One of the stated purposes of the Utah
School Superintendents Association is “to actively seek and support needed legislation and funding for
public education” (USBA, 2011).
Although another recent bill approved a two percent raise for new student growth funding, the
allocated resources don’t fully cover the upcoming expenses. “For the coming school year, 2011-12, we
will see approximately 14,754 new students, which will cost about $57 million,” said Tami Pyfer, a Utah
State Board of Education member. “The Legislature gave us $30 million in new funding for these
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students and took another $27 million from other, existing programs to fund that growth. Nearly half of
the money came from reallocating funds from existing programs” (Sargsyan, 2011).
It is apparent that the administrators of our public education system are under a great deal of pressure
to simply maintain the status quo. However, the implications of advertising on public school buses
reach far beyond just bandaging inadequate funding. Legislative bodies throughout the nation are
attempting to dismiss their constituents’ responsibility for education by allowing school boards to ‘fend
for themselves.’ And, while the motive for such decisions is directly related to political survival (no tax
increases), we all seem to be turning a blind eye to the much more serious issue of allowing
governments to directly participate in free enterprise to subsidize a public service that should be funded
through taxation.
Who’s Excited?
Enthusiasm for advertising on school buses comes from many angles and includes lawmakers, teachers,
advertisers, advertising agencies, and law firms. Those not so enthused are school board administrators,
public policy advocates, the National Association of State Directors of Pupil Transportation Services
(NASDPT), and school districts that are beginning to realize that the financial gain isn’t nearly what was
anticipated.
The NASDPTS published a position paper as reported in the online School Transportation News (STN)
regarding advertising on school buses. They stress that safety concerns and the potential for First
Amendment litigation could outweigh any benefit (Gray, 2011). STN goes on to cite two relevant court
actions:
The Indiana Department of Education's general counsel issued an opinion in April of
1996 that school bus ads could have First Amendment and equal access implications
because school districts could find themselves unable to restrict or control content. And,
in 1993, a U.S. District judge in Boston ruled that the Massachusetts Bay Transportation
Authority's "G-rated" ad policy violated the U.S. Constitution because the advertisement
in question pertained to the use of condoms to prevent the spread of AIDS. The federal
judge stated that a transit service cannot open its transit car door to public service
advertising and hang only its favorite posters.
Sen. Bill Montford, D-Tallahassee and a former school superintendent and the current head of the
Florida Association of District School Superintendents, says that school bus advertising "provides an
investment-free source of revenue for school districts." He pleaded the case with Lilly Rockwell in an
interview for the Palm Beach Post that school districts are in dire need of money to pay for
transportation. In the interview, he suggests that “it’s actually more restrictive than the current practice
of advertising on some athletic fields” (Rockwell, 2011). In many ways, “more restrictive” suggests more
oversight, administration, and caution.
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The Campaign for a Commercial Free Childhood, in response to Oklahoma’s proposed S.B. 509 to allow
advertising on public school buses, takes the following position:
We are enormously concerned about the financial plight of schools. But
commercializing our children’s education is not the answer. It undermines the
educational process. Anything advertised on school buses will have that school district’s
implicit endorsement. Also, if schools turn down certain advertisers they deem
inappropriate, they could be subject to costly First Amendment challenges (Blaiz, 2011).
Advertising agencies throughout the nation are making claims of hundreds of thousands, even millions,
of dollars in additional revenue to school districts with “good local support” (Conover, 2011).
Michael Beauchamp, President of Alpha Media, which manages advertising on 3,000 school buses in
Texas and Arizona, says “School buses offer the visibility of daily trips throughout a community – along
with the associated sensitivity of the commercial influence on young children. This is more lucrative.”
Beauchamp also claims hundreds of thousands of dollars in projected revenue from just 100 buses
(Bazar, 2005).
In Mesa, AZ Jim O’Connell, president of Media-Aim, sells space for districts in Scottsdale, Phoenix,
Tucson, Lake Havasu, and Yuma. In contrast to Mr. Beauchamp, he says “You’re not trying to reach
school kids. You’re trying to reach the community” (Hacker, 2010).
Obviously, the target markets vary widely from one advertising agency to another. However, it’s clear
that the autonomy given to local school boards in determining ‘appropriate’ advertising can be
extremely subjective. Allowing agencies to target ads toward ‘sensitive and influential children’ versus
the ’community’ displays a wide spectrum of audience and intention.
Don Templeton, owner of Templeton Marketing Services, funds school bus advertising for the Rio
Rancho Public School districts in New Mexico, expects business to pick up as the program gets rolling.
“Hopefully, we can get some big names on board.” In the near future, he anticipates seeing “National
Guard ads along with restaurants and pizza places in town.” Cindi Serrano, parent and member of the
Rio Rancho transportation task force says “A lot of people have their opinions on if advertising should be
on the buses, but the bottom line is that it’s so our teachers have money to teach our children”
(Littman, 2011).
Friendsworth Independent School District, operating in a suburb of Houston, Texas, signed on for school
bus advertising. But, in the first six months, ads brought the school only $955 in revenue. Job cuts and
larger class sizes are now part of the districts continuing plan to deal with diminishing revenue (Conover,
2011).
In the April 10, 2011 edition of the Herald Journal, a Cache Valley news website, Board of Education
member Tamara Grange states, “I don’t think advertising is a positive thing on school buses.” Tami
Pyfer, also a Utah State Board of Education member, said: “I was not in favor of this legislation just for
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the reason that I think it’s a pretty sad day when we have to sell advertisement to fund public education.
State funding is necessary for school districts to keep their head above water” (Sargsyan, 2011).
Traditional Role of Government in the United States
Cost cutting is alien to the culture of all bureaucracies. Indeed, when cost cutting is inescapable,
bureaucracies will often make cuts that will produce maximum public inconvenience, generating public
pressure to reverse the cuts. It is government’s job to make and enforce the rules that allow a civilized
society to flourish (Gordon, 2009).
Government is not a business. And good governments cut expenses during tough economic times
rather than seek little-tried and possibly troublesome ways of raising money (Conover, 2011).
In 1986, the second White House Conference made unfair, government-sponsored completion one of its
top three issues.
Government at all levels has failed to protect small business from damaging levels of unfair
competition. At the federal, state, and local levels, therefore, laws, regulations, and policies
should prohibit direct, government-created competition in which government organizations
perform commercial services. Funds controlled by a government entity must not be used to
establish or conduct a commercial activity on U.S. property (BCFC, 2010).
James Holman, policy analyst for the Mackinac Center for Public Policy, says that government should
stay out of running business. “There are competitive issues for them to refrain (from entering free
market ventures). Lack of taxation, favoritism, enforcement issues, and the availability of taxpayer
bailouts tilt the playing field against legitimate business” (Gantert, 2010).
Inevitable Litigation
A Florida Association for Pupil Transportation report published in January 2011, taking a position against
school bus advertising, laid out some salient points. Citing support from a 1996 Indiana State legal
opinion:
Supporters of advertising on school buses believe that committees should be formed to
establish criteria for the appropriateness of advertising, and believe the criteria will protect
them from legal action. The fact of the matter is that such criteria may be challenged in court,
and it is impossible for anyone to predict the likelihood of success of any legal challenge to
restricting the type of advertising on school buses. While legal challenges to state or local
policies may or may not occur, the potential of a lawsuit is always present. Although no freedom
of speech challenges have come from such advertising, schools should not leave themselves
open to having to make such decisions by stepping into the bus advertising arena. A school
district forced to defend itself against a First Amendment lawsuit might end up spending more
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than the bus advertising brought into its coffers ($995 to Friendswood, Texas, in six
months)(Conover, 2011).
On March 31, 2011 a Michigan Federal Judge ordered a Detroit-area transportation authority to display
an anti-Jihad advertisement on its buses. Judge Denise Page Hood granted an injunction request filed by
the Thomas More Law Center (TMLC) to reverse the bus authority’s refusal to display the ads. An
evidentiary hearing on the injunction request was held in July 2010. Judge Hood granted the injunction,
finding that “[t]here is a strong likelihood that Plaintiffs could succeed in demonstrating that
Defendant’s decision not to run the advertisement was not reasonable, but rather arbitrary and
capricious.” The Judge also ruled that the loss of Plaintiffs’ First Amendment freedoms “for even
minimal periods of time, unquestionably constitutes irreparable injury . . . sufficient to justify injunctive
relief,” and that “[b]ased on Plaintiffs’ likelihood of success on the merits, it is in the public’s interest to
grant the preliminary injunction” (TMLC, 2011).
Response from Marketer and Citizen
In a face-to-face interview with Jared Lewis, an account executive with Richter 7, a local advertising firm,
I had the opportunity to hear his professional as well as personal position on the subject of advertising
on school buses.
Grey: Do you see commercial advertising on Utah’s public school buses as an advantage or
disadvantage?
Mr. Lewis: Definitely an advantage. I believe public schools and education are a ‘right’ of any
citizen in a democracy. We entrust school boards to educate our children, why not extend that
trust to their ability to manage this program.
Grey: Do you see any issues surrounding unfair competition within your market with this by
school boards? For example, do you have customers that you might potentially lose to school
districts?
Mr. Lewis: No. We have a competitive quality stance. Politics and human behavior will drive
this market.
Grey: If your company successfully gained a contract to manage school bus advertising, what is
a typical profit margin you would require?
Mr. Lewis: 15%.
Grey: Do you foresee any potential markets making issue with being denied advertising
opportunities on school buses?
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Mr. Lewis: Activists will drive ‘unfair’ claims even more than those who are being denied access.
Advertisers who are rejected will typically keep silent in an effort to avoid any type of negative
public backlash.
Grey: Do you think potential advertisers are more attracted to K-12 or adults?
Mr. Lewis: I believe it works simultaneously. Advertisers will target 25-36 year old adults with
products for K-12.
Grey: Do you see any overriding ethical issues associated with government participating in such
a free enterprise to generate revenue?
Mr. Lewis: The first issue I see is that voices (advertisers) are being granted or denied by
institutions that are publicly funded. And, as is the case with our economic model, the highest
bidder will ultimately eliminate any ethical voice. In the end, money dictates right over wrong
and, while this may not appeal to a moral or ethical stance, it is, nevertheless, the nature of the
culture we live in.
CONCLUSION
As evidenced in this research, those most willing to accept this type of venture are advertising agencies
that will profit regardless of the outcome, lawmakers who see this as a way to avoid tax increases, and
teachers who are desperate for any type of relief to educate their students. Those opposed include
school board administrators who are now faced with the task of managing these programs and the high
degree of controversy that goes along with them.
Districts now engaging in school bus advertising are all beefing up staff and legal resources, at significant
costs, to facilitate administration as well as prepare for the onslaught of inevitable litigation from
potential advertisers, advertising agencies, and parents. School boards are not equipped, nor should
they be, to engage in private enterprise.
How far have we gone when we begin to fund public education with military recruitment
advertisements, or by allowing our public assets and facilities to be adorned with advertisements that
school boards deem to be most lucrative (appropriate)? What restrains government from furthering
this type of direct, revenue generating activity within the “free market”? If school bus advertising is
acceptable, then why would it not be alright for government to create its own ‘ad agency’ on a state or
even national scale to generate revenue to offset budget cuts? State trooper vehicles displaying
beverage ads to the highest bidder? F-15 fighter jets with a Gecko under each wing? All of this in an
effort to generate funds in excess of what ‘we the people’ are willing to pay in taxes.
Governments throughout the nation are struggling with revenue, but this isn’t just because of our most
recent economic crisis. They will never have enough funding to satisfy all of the people all of the time.
Their track record speaks for itself. Rough economic times, however, provide an opportunity for
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lawmakers to shrug their responsibility to operate within their tax base. We are enabling them to spend
beyond their (our) means, taking resource streams from business.
No one likes to pay taxes, but the flip side to that is that if we are paying taxes we are making wages. If
we give government free reign to operate within the free market, we might find ourselves compounding
our tax burden in the form of collecting unemployment, rather than contributing.
RESOLUTION
Ultimately, any attempt to regulate government activity requires political activism. Maybe the only way
to present the inherent problems associated with government generating revenue outside of its tax
base is to let it run its course. It would seem that saving a few hundred dollars on your tax return is
more relevant than spending twice that on fuel costs associated with giving your child a ride to school
every day.
Solutions appear to be quite simple: We Must
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Be responsible as a government and as citizens
Realize that nothing is for free
Be straight forward if we make a political promise
Increase Taxes
Postpone non-critical highway infrastructure.
Expend more attention to the abuses of unemployment benefits
Stop taking advantage of every entitlement the government has to offer
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Sources
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from http://www.usatoday.com/news/nation/2005-12-26-school-advertising_x.htm
BCFC, Business Coalition for Fair Competition. (2010, June 30). Retrieved on April 15, 2011, from
http://www.governmentcompetition.org/uploads/BCFC_Comment_to_SBA-OMBBlaiz, A. (2011, March 8). Bill to allow school bus advertising progresses in Oklahoma Senate - Action
Needed. Oklahoma Citizen. Retrieved April 1, 2011, from
http://oklahomacitizen.org/2011/03/08/bill-allow-school-bus-advertising-progresses-oklahomasenate-action-needed
Conover, D. (2011, February 10). School bus advertising a hard sell. Retrieved April 2, 2011, from
http://dukeconover.blogspot.com/2011/02/kentucky-is-considering-school-bus.html
Gantert, T. (2010, November 22). Government Putt Putt Golf in Jackson. Michigan Capitol Confidential.
Retrieved March 28, 2011, from http://www.michigancapitolconfidential.com/14047
Gordon, J. S. (May 21, 2009). Why Government Can’t Run a Business. The Wall Street Journal. Retrieved
March 26, 2011, from http://online.wsj.com/article/SB124277530070436823.html
Gray, R. (2011, March 16). NASDPTS Cites Safety, Legal Concerns in Opposing School Bus Ads. School
Transportation News. Retrieved April 9, 2011, from http://www.stnonline.com/home/latestnews/3202-nasdpts-cites-safety-legal-concerns-in-opposing-school-bus-ads
Hacker, T. (2010, August 12). Mesa district gets rolling with school bus advertising. East Valley Tribune.
Retrieved March 25, 2011, from
http://www.eastvalleytribune.com/local/mesa/article_3b344f2a-a65d-11df-b7a9001cc4c03286.html
Interview with Jared Lewis. (2011, April 15). Richter 7 Advertising Agency.
Littman, A. (2011, March 23). A first in state: School bus ads make a debut. Rio Rancho Observer.
Retrieved April 1, 2011, from http://www.rrobserver.com/news/local/article_fed27fb2-54ac11e0-b432-001cc4c03286.html
McGair, B.C. (2010, September 16). Rudder-Addiego Bill On School Bus Advertising Sails Through
Education Committee. NJ Assembly Republicans. Retrieved on April 15, 2011 from,
http://www.njassemblyrepublicans.com/press_release.php?id=1636
Rockwell, L. (2011, March 23). The News Service of Florida. Palm Beach Post. Retrieved April 1, 2011,
from http://www.palmbeachpost.com/news/state/lawmakers-on-board-with-ads-on-schoolbuses-1343208.html
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Sargsyan, S. (2011, April 10). Cache Valley school buses to carry advertising. The Herald Journal.
Retrieved April 15, 2011, from http://news.hjnews.com/news/article_011d7a06-6321-11e08b0e-001cc4c002e0.html
Steinhauer, J. (2009, September 24). In Need of Cash, Arizona Puts Offices on Sale. The New York Times.
Retrieved April 9, 2011, from
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h,%20Arizona%20Puts%20Offices%20on%20Sale&st=cse
TMLC, Thomas More Law Center. (2011, April 1). Free Speech Wins in Battle Over Anti-Jihad Bus Ads.
Detroit, MI: Catholic Lane.
USBA, Utah School Boards Association. Mission Statement. Sandy, UT. Retrieved April 1, 2011, from
http://usba.cc/about-usba/mission-statement/
I would also like to give special thanks to my Dad, who acted as my editor, voluntarily and involuntarily.
His opinions along with influences were of great help to my interest in the topic and the overall
completion. I couldn’t have done it without him.