New Mexico school districts are scrambling for emergency state funding to keep their buses running as diesel prices nearly double from a year ago — and the bill is landing on classrooms and taxpayers.
The average price per gallon of diesel in New Mexico hit $6.20 this week, up from $3.13 a year ago, according to AAA. The national average reached an all-time record of $6.53 per gallon. That kind of jump doesn't just pinch commuters; it wrecks the budgets of public institutions that have no choice but to buy fuel. Albuquerque Public Schools, the state's largest district, operates 175 diesel-powered buses that log roughly 27,250 miles every day hauling nearly 30,000 students. Last year the district paid $2.06 million for fuel. This year, at the same mileage, APS could spend up to $3.8 million — a $1.7 million gap. "While we actively budget for market volatility, we never anticipated prices would soar to the record-breaking levels we're seeing today," APS spokesperson Martin Salazar told the Albuquerque Journal.
The New Mexico Public Education Department has received a "handful" of emergency transportation funding requests and is evaluating them, managing director Seana Flanagan said. The state set aside roughly $8.6 million for transportation emergencies this year out of $144 million in total transportation funding. But the Legislature's formula ties funding increases to the Consumer Price Index — a lagging indicator that hasn't caught up to what diesel actually costs. "Increases to the consumer price index from last year do not account for the significant increases in diesel costs we are currently experiencing," Flanagan said.
Out in Gallup-McKinley County, the state's largest district by geography at nearly 5,000 square miles, the squeeze is already here. Superintendent Jvanna Hanks said the district buys diesel in bulk at a slight discount — $6.11 per gallon — and has still spent 55.6 percent more on fuel than at this point last year, just two months into the school year. "I'm just hopeful that anybody can get some relief in the short term," Hanks said. "Prices seem to be escalating everywhere and budgets are not going to be able to carry it."
The Albuquerque Journal reported that fuel prices are expected to stay elevated "as a result of the United States' attacks on Iran in February, which disrupted oil transport through the Strait of Hormuz." There it is: foreign adventurism constricting global supply, while domestic production remains shackled by policy. The costs don't vanish. They get passed down to school districts that have to choose between filling bus tanks and funding classrooms.
And it's not just diesel. In Dixon, Illinois, the school board just approved a fiscal 2027 budget projecting a $2 million deficit, driven by health insurance costs jumping another 15.2 percent and the loss of more than half its federal funding since 2025, Shaw Local reported. District business manager Marc Campbell called insurance costs one of the "biggest threats" to the budget. The district's education fund alone faces a $3.8 million deficit. Different state, different cost driver, same result: the people who depend on public institutions absorb the hit while the people who created the conditions write press releases.
New Mexico has $8.6 million in emergency transportation funds. APS alone could eat a quarter of that just covering its diesel shortfall. The question isn't whether the money runs out — it's who gets left standing when it does.
