A failing bus bureaucracy’s fate now rests in the hands of voters.

Gov. Greg Abbott signed two bills last week that call for scandal-plagued Dallas County Schools to be abolished unless county residents vote to keep the tax-subsidized agency open – assuming it doesn’t fail first.

Senate Bills 1566 and 2065 both contain provisions for Dallas County voters to decide in a November election whether to keep the troubled agency open or wind it down, pay off its substantial debts, and distribute its assets to school districts that use its bus services.

State Sen. Don Huffines (R-Dallas), who authored the original legislation to abolish DCS, called on lawmakers to shut it down directly, saying they had an obligation to protect students and taxpayers from a chaotic collapse of the mismanaged agency. But Sen. Royce West (D-Dallas) fought for a concession to punt the decision to voters.

Ten school districts, including Dallas Independent School District, currently contract with DCS for bus service. But all Dallas County taxpayers are forced to subsidize the bureaucracy with a one-cent ad valorem property tax – whether their school district uses DCS services or not.

That tax alone nets the agency over $20 million a year; it gets another $20-million annual transportation allotment from the state, on top of the money it collects from customers for bus transportation and other services.

Yet DCS is over $130 million in debt and just two weeks ago defaulted on over $9 million in debt payments – the first default by a Moody’s-rated entity in two years, according to Bloomberg. The agency has since made the overdue debt payments, but it’s not clear where the cash-strapped agency got the money, as it’s been financing daily operations with borrowed funds.

Moody’s downgraded the agency’s already-lowered credit rating twice in May – to junk and then below-junk status. After the default, Moody’s said that “dissolution is now a high probability” for DCS and the agency’s “liquidity problems and growing inability to pay its obligations increases the potential the district may file for bankruptcy.”

Financial mismanagement is far from the agency’s only problem.

DCS has been rocked by scandals over everything from covering up safety violations, to misuse of taxpayer money, to allegations of corruption. Records also reveal the tax-funded agency spent more than a million dollars on legislative lobbyists and consultants over the past three years.

Now NBC 5 Investigates – a local news team that’s been exposing problems within the bureaucracy for months – reports that the Texas Rangers and the FBI are investigating whether any criminal activity contributed to the financial crisis at DCS.

Interim Superintendent Leatha Mullins, who took over in March after former Superintendent Rick Sorrells was forced to retire in the face of mounting scandals, defended her employer’s expenditures on lobbyists, saying “the agency needed to hire professionals to assist us in communicating to the legislature.” But even those tax-funded professionals were unsuccessful in convincing lawmakers that DCS should be kept open.

Sen. Huffines said it’s past time to shut down the outdated and problem-plagued bureaucracy:

“With the signing of Senate Bill 1566, voters will have the opportunity to ensure a smooth and workable transition for students and schools to find safer, more reliable, and more cost effective bus service. Now, as criminal investigations proceed, I am confident that voters will abolish this corrupt and dangerous government bus bureaucracy. It’s outdated and redundant government run amok, and it’s past time to close the door on this embarrassing chapter in our County’s history.”

Mullins warned that the decision “will have dire consequences for all of the school districts involved.” Yet two districts – Weatherford and Coppell – have already fired DCS this year.

The bureaucracy’s largest customer, Dallas ISD, is readying for the transition, should voters decide in November to shut down the ailing bus bureaucracy. DISD is actively seeking transportation alternatives for its own 40,000 bus-riding students – and is also “prepared to take on the responsibility of transporting” about 35,000 students in smaller districts that currently contract with DCS “for an interim period” so the needs of Dallas County students, school districts, and taxpayers are met.

Erin Anderson

Erin Anderson is a Senior Journalist for Texas Scorecard, reporting on state and local issues, events, and government actions that impact people in communities throughout Texas and the DFW Metroplex. A native Texan, Erin grew up in the Houston area and now lives in Collin County.