Strapped for cash in a tight budget year for the city, Boston's public schools has no choice but to change, BPS Superintendent Carol Johnson told a fired-up Boston City Council last Friday afternoon.

The council's hearing on the BPS transportation budget is always an interesting show, for the history it dredges up, and for the complex system of transporting students to and fro that it exposes. For the first time in years, the stars seem to be aligning for massive reform of that system, also known as busing.

Councillors Stephen Murphy and Chuck Turner traded barbs even in the opening remarks, disagreeing over words used to describe the history, which dredges up awful memories for most natives of a certain age. Turner related the current busing program back to the inequitable and segregated public schools of the 60s and 70s, while Murphy referred to the 90s, when the current program, post-federal court ruling, was created.

"A federal judge stepped in because there were decisions being made that were not equitable across all the races," said Turner, amending the chair of the Ways and Means Committee's introduction with talk of litigation. "While we're facing a very different financial situation, the reality is that if we adopt any type of plan that is discriminatory to any students, then obviously we're back in court. Whatever we come up with, it has to be seen as fair to all the students and all the neighborhoods."

"I don't think my good colleague to my right was listening when I spoke," retorted Murphy, the chair. "I simply said that in 1991, after the court dis-involved itself… We had two geniuses from Harvard come in here and put this plan together, which is holding us hostage. It had nothing to do with the 70s or the 60s or taking it to the streets or anything like that.

"As far as I'm concerned, this is the last time," continued Murphy, turning to address the BPS leadership assembled at the desks in front of him. "You've got to come back with a new assignment plan."

The "Controlled Choice" plan of Charles Willie and Michael Alves - the "two Harvard geniuses" - was based on maintaining desegregation after Judge Arthur Garrity turned over the administration of the schools to the School Committee, but was significantly altered by lawsuits filed in 1995 and 1999 that claimed white students were being denied their school of choice based on race. A new policy starting in 2000 eliminated race as a component of school assignment, thus paving the way for today's system, where many schools are once again effectively segregated - many with student populations well over 95 percent children of color - and busing patterns crisscross each of the city's three school zones according to parent's choice.

Particular schools have become increasingly popular choices for parents, school officials said, bringing the percentage of students who get their first choice of school down to around 48 percent, and second choice to 15.6 percent. Numbers were much higher in the 90s when controlled choice was unveiled.

Johnson has been striving to meet a $30.7 million budget shortfall for the 2008-2009 school year, according to city and school officials, and has found some $18.7 million in cuts, mostly administrative, and has convinced the city to contribute $10 million from the city's reserves.

Though fuel costs are rising fast, guzzling over $5 million during the 2008-2009 school year compared to $1.8 million in 2003-2004, several other factors have driven BPS transportation costs up over $75 million, including medical insurance and rising MBTA fares.

A precipitous decline in enrollment, creating extra capacity in the school's facilities, is another costly factor, according to BPS's COO Michael Goar. Over 7,000 seats are open compared to the student population of five years ago.

"Even accounting for the downward trend in birthrate, we're losing our market share," Goar said, adding that food costs are also on the rise.

The solutions, said school officials, will come from a two-phase plan to pare down costs. In phase one, already being implemented, Johnson is looking at costs that can be reduced in the short-term, "less controversial" things, such as changing the bus insurance policy or finding more efficiency in how buses are routed.

The harder questions, such as closing schools and redesigning the school assignment system and the transportation plan that enables it, will happen in phase two. Recommendations for school closures could come as early as September this year, a new transportation plan is likely to take longer, and with much community process.

"The changes we recommend will not happen in one year, but over the next three years we will introduce efficiencies," Johnson said. "It's really about making sure the money we use is used for educational purposes, not only for getting kids to school… and also giving them a choice."

Freshman Councillor at-Large John Connolly, a former teacher, told the Reporter that he has anticipated this hearing for months, and waving around a stack of studies that tout middle-class investment as a key indicator of a school district's success, he made an impassioned speech at the hearing.

"Anytime we talk about school transportation in Boston, we're talking and touching on Boston's very painful past and the scars that we bear through to today," said Connolly. "The data points to the fact that at-risk and underserved kids will achieve at greater rates with a middle-class invested in our schools and I don't think we think enough about how to keep the middle-class in our schools. The fact that there was real institutional racism in our past doesn't mean the policy works. The policy has been an utter failure.

"I want my child to be educated in our public schools in diverse class rooms, and a diversity that ranges on from race and ethnicity on to philosophy and religion," he continued. "I think we have to find a policy that works for our kids."

As to Menino's position, press secretary Dot Joyce said everything is on the table.

"It's difficult to look on as dollar after dollar goes into gas tanks instead of our kids education," said Joyce. "We look forward to seeing some sort of proposal before next year."