The Gilroy Unified School District will consider charging students for transportation in the coming years to help reduce spending from the district's general fund. And with Gov. Arnold Schwarzenegger proposing deeper cuts to school transportation funding, the district may have no other choice, administrators said.

"Right now we have a balanced budget," Superintendent Deborah Flores said. "But if things were to become much worse, transportation is one of the items we'd have to revisit. I don't think I can rule anything out. The state's proposals could mean pretty devastating cuts."

District estimates show that small fees could generate about $182,000 in revenue - still not even half the amount transportation siphons from the district's general fund.

"We're not making money," said trustee Francisco Dominguez. "We're covering the cost of operating a program."

District ridership is up to 1,219 students and shuttling them to and from school costs about $1.6 million. The state pays for only about half that amount, according to district documents. Various other revenue streams, including almost $500,000 from the district's general fund, make up the difference. To boot, the governor proposed cutting about 65 percent of the state's share - about $547,000 - Deputy Superintendent of Business Services Enrique Palacios told trustees last month.

"We can't afford to have that encroachment on the general fund anymore," Flores said, but "no way can we pass on the full cost of school transportation to students," Palacios said.

Instead of scrapping transportation altogether - like some urban districts have done - trustees discussed charging students based on their eligibility to receive free or reduced meals from the district. Children who receive free meals from the district would still receive free transportation. Children who receive meals at a reduced rate would pay $180 annually and children who pay full price for meals would pay $360 annually, according to a district proposal.

Students' eligibility to receive free and reduced lunch is based on household size and family income. For example, a student living in a five-person household that earns less than $32,240 annually is eligible to receive free meals, according to the district.

By getting the word out early, better enforcing the district's walk zones and tweaking bell schedules to maximize efficiency this year, district trustees and administrators hope to make the transition as painless as possible, Flores said. The district is not required to provide free home-to-school transportation and many surrounding districts charge fees.

Trustees also considered expanding the district's walk zones, but did not reach a final decision. Currently, elementary students living within one mile of school and middle and high school students living within two miles of school are not eligible for district transportation. Adding one or two miles to the middle and high school walk zones could eliminate services for up to 845 students and save the district up to $225,000 in costs, according to district documents.

The district is also looking into issuing transportation identification cards to eligible students to help enforce the district walk zones, Flores said. No card could mean no ride, Flores said, though she still had concerns about turning students away. Getting the word out is important so that fees don't affect attendance, she said.

"Given time, we can phase this in properly," she said.

But bus drivers weren't so sure.

"You add a couple more bills here and there, it could put families over the edge," said driver Linda Figone.

Speaking for most bus drivers, Figone said she had many questions about who would police the new rules and how fees would impact attendance.

If a student's account is delinquent, "who's going to get them to school?" she said. "Kids nowadays don't want to put in the effort to get there. If we charge and they can't pay and they don't want to walk, they won't come to school."

But Dominguez said the district was caught "fighting a moving budget target" and research of districts that charge doesn't show a trend toward lower attendance.

"I think people would be willing to pay a minimal amount," he said.

But if routes are eliminated, drivers lose hours or jobs, Figone said. Only a third of the district's drivers worked 40-hour weeks last year, according to district documents. Instead of charging students, Figone suggested staff - from teachers to custodians to administrators - take the same kinds of cuts drivers took this year to save money.

Earlier this year, when the board discussed charging for transportation and then shelved the idea until recently, driver Rebecca Scheel told trustees that some families simply cannot pay.

"Those kids cannot afford it," she said. "You're not talking about a dollar a family. I pick up at a stop where there's 12 kids that get on out of one little trailer. That's $12 a day. They don't have it. They don't spend that much money on dinner."

DISTRICT FEE PROPOSAL

- Free for children eligible for free meals (~650 students)

- $180 annually for children eligible for reduced meals (~80 students)

- $360 annually for children who pay full price for meals (~470 students)

District transportation

About 1,200 students ride school buses. This is how it funds the program:

- $843,000 from state

- $220,000 from categorical funds

- $492,000 from district's general fund

- $48,000 from local revenue

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- $1.6 million - total cost

- $182,000 - proposed revenue from fee