The intent of the research reported in this paper was to substantiate a formula that would remedy the defects inherent in the present New York State transportation aid formula that reimburses districts 90 percent of approved costs. Thirty-six variables were either recorded or calculated for the 700 school districts in the state. Correlation matrices were produced using all the variables to identify those variables that were strongly related to expenditures. Multiple regression analysis equations were calculated using pupil transportation expenditure variables as the dependent variable and various variables highly related to transportation expenditures as the independent variables. In chapter 2, information concerning the scope of the pupil transportation system and its characteristics is presented followed by a discussion in chapter 3 of the administration of the transportation aid process by the State Education Department. Chapter 4 is concerned with the operation of the system with regard to safety and efficiency. Chapter 5 contains an evaluation of the current state aid formula, and in chapter 6 a proposal for a new formula is presented. (Author/MLF)