Bay of Plenty ratepayers will pay nearly $270,000 this year to help subsidise fares for Bay of Plenty Regional Council's new Schoolhopper bus service.

The expected rate rise comes after the Ministry of Education withdrew its funding for Tauranga's urban school bus routes at the end of 2014 – leaving more than 3000 school students without a bus service.

Photo: File.

Council stepped in to plug the gap with the Schoolhopper service and will see children charged $1.15 for concessionary travel and $1.60 for cash fares from term two.

The financial decision was made to allow children to ride for free this term, providing parents with some security for the new school term after sweeping changes to the previously free bus service.

In turn ratepayers will make up the difference between the fares students will start paying from term two and New Zealand Transport Agency subsidies.

Bay of Plenty Regional Council transport policy manager Garry Maloney says picking up the costs of school buses was part of the extra $2.5million of public transport costs for the year - split between bus fares and ratepayer and transport agency subsidies.

A council Long Term Plan consultation document reads: 'We are spending an extra $2.5million on public transport due to increased costs of new contracts, and transporting 3000 students per day who previously used government-provided school buses.”

The $2.5million will take council transport spending to $18million for 2015-16, rising to a projected $25million by 2025. Public submissions have opened on the council's 10-year plan.

After taking increased revenue and grants into account this will cost about 10 cents more in rates per property plus $2.70 per property in targeted rates for Tauranga and Rotorua.

It is understood about $125,000 would be collected from a targeted rate levied on Tauranga ratepayers and $143,000 from the general regional rate.

The ratepayers will contribute $850,000 of extra public transport costs next year.

Garry says expenditure in 2014/15 will be about $1.146million, while it is estimated for the same period council will collect $160,000 in fares.

NZTA will fund about $493,000 and the remaining $493,000 will be funded by regional council through general funds and targeted rates.

The following year's (2015/16) expenditure will rise to $2.7m along with an estimated $855,000 in bus fares.

NZTA will fund about $923,000 and the remaining $923,000 through general funds and targeted rates.

In 2014 council ran about three million passenger trips, mostly in Tauranga and Rotorua. It is estimated in the next 10 years council will spend $250m on public transport services – funded by bus fares, general funds, targeted rates and NZTA grants.