FRANCIE: Paris is student body president – big fat deal. There are three other class presidents – the junior class president, the sophomore class president, and oh, yes, the senior class president – me.
RORY: I know all this.
FRANCIE: Well, then, it’s off the short bus for you, isn’t it?
The short bus refers to a shorter school bus used for transporting children who are physically disabled or who are being educated in special programs, often for learning disabilities.
It is a derogatory way to refer to the mentally challenged, and to call someone stupid, dumb, or slow. Francie is saying Rory is smart enough not to be considered intellectually disabled.
I would like to think that Francie using this offensive language is the writer’s way of letting us know she’s a bad person, except … what would this incident say about Rory?
The Annotated Gilmore Girls 