COLUMBIA, S.C. (AP) - The state's Education Department might be able to save money by privatizing its school bus system, Gov. Mark Sanford suggested during a budget hearing Wednesday.

South Carolina is the only state in the nation that owns and maintains its school bus fleet, education officials say. It's a costly effort that requires millions of dollars for maintenance, repair, replacement and staffing.

Next year, the Education Department will need $67 million more for its transportation system, State Superintendent Inez Tenenbaum told Sanford. That money would pay for bus repair and maintenance, new buses and other equipment and increases in driver salaries.

Overall, the Department says it needs $500 million more than its current state funding in the next fiscal year. Most of that money - $340 million - would be used to help the state meet the $2,201 base student cost that the Board of Economic Advisors has said is required under a state school funding formula.

Sanford is gathering input from state agencies as he prepares his executive budget. A privatized school bus system might save the Education Department money, Sanford said.

A 1998 study by the Budget and Control Board found the state could save as much as $250 million each year by privatizing its school bus system, Sanford said.

Tenenbaum said a pilot run by school districts in Charleston and Beaufort counties after the study was released showed no savings.

"Privatization is not going to save us any money," Tenenbaum said.

The school bus problem is a cyclical problem that has been popping up since the 1980s, said Sanford's chief of staff Fred Carter. Changing that will require creativity, he said.

"Our approach this time needs to innovative," Carter said. "It needs to be creative. This time we've got to take a different approach."

Tenenbaum says her agency looks forward to working with the governor to come up with a solution.

Privatization, though, is no easy fix and poses a number of challenges that rival current ones, education officials say.

Contracting with private companies could be costly because most would require newer buses replaced routinely and would pay mechanics more competitive wages, said Education Department spokesman Jim Foster.

Many buses in the state-owned fleet are more than 20 years old, and mechanics make $10 an hour.

Another challenge is that private companies are more willing to bus students in urban areas where the routes are shorter than in rural areas, Foster said.

Urban sprawl contributes to that problem, Sanford said. As students move farther from the center, buses have to travel longer routes, he said.

About 335,000 students are taken to school each day on South Carolina's 5,600 school buses.