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Wealthy Texas school districts kept millions

From The Houston Chronicle

By DANNY ROBBINS 2010 The Associated Press

Nov. 14, 2010, 6:18PM

HALLSVILLE, Texas Dozens of wealthy Texas school districts held onto more than$40 million in tax dollars that should have gone to poorer districts under the state's so-called "Robin Hood" law until the state demanded they pay up this year, according torecords obtained by The Associated Press.

The Texas Education Agency discovered the delinquencies during an unprecedentedreview last summer. The review found that the school district in Hallsville had gonemore than a year without paying and accounted for about 20 percent of the delinquent

funds.

The Harrison County district attorney is investigating the Hallsville district to determinewhether criminal activity was involved in the withholding of $8.5 million owed to the state

money the East Texas district used to improve salaries and equipment and achieveits first exemplary state rating. The district has since fired its longtime auditing firm.

Under the "Robin Hood" law, schools that collect large amounts of property tax revenue,either from valuable land or large industry in their districts, are required to make annualpayments to the state, which then distributes a share of that money to poorer districts.The law, unique to Texas, was enacted 17 years ago in an attempt to equalize

educational opportunities in a state that relies heavily on local property taxes for schoolfunding.

The TEA reviewed the work of the employee responsible for monitoring "Robin Hood"payments and discovered in July that 38 districts owed $43.1 million that was eitherpast due or due by the end of August, according to agency records obtained by the APunder the Texas Public Information Act. When the letters went out, 23 districts still owed$15 million that should have been paid months earlier to settle up for the 2008-2009school year.

Most of the districts paid what they owed after receiving the letters, said Lisa Dawn-

Fisher, the agency's deputy associate commissioner for school finance.

Dawn-Fisher said the review, the first of its kind by the agency, led the TEA to fire theemployee and change its policy on collections. Instead of dealing strictly with schooldistrict business managers, the agency now contacts superintendents as well, she said.

"Definitely more attention should have been paid on all sides here," Dawn-Fisher said.

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David Sciarra, executive director of the New Jersey-based Education Law Center, saidthe TEA's inattention to collecting the money is surprising, given how critical "RobinHood" is to keeping poorer districts operating.

About a third of Texas' more than 1,000 school districts annually send about $1.1 billion

to the agency for redistribution, according to TEA officials.

"This is the one mechanism you have to create fair school funding," said Sciarra, whosegroup monitors public education funding nationally. "At the very least, the state shouldbe all over it."

Hallsville, the most blatant offender, failed to pay nearly $8.5 million, including the entire$7.3 million it owed for 2008-2009.

The issue, the first known case of a district failing to pay over an extended period oftime, has created an ongoing controversy in the 4,200-student district and left many

who closely follow public education in Texas stunned.

"Maybe you miss a check or two, but this is so far beyond the pale of reality," said ClintCarpenter, a former Texas school superintendent who has taught courses on schoolfinance at Texas Tech University.

Instead of sending the $8.5 million to the TEA, Hallsville used it to help fund a three-year, $25.3 million spending spree that coincided with the district raising itsaccountability rating from academically acceptable to exemplary. Among the district'sexpenditures was $13.4 million for the hiring of 110 new employees, including 60teachers.

Since learning of its error, the district has paid what it owed by borrowing from a bank.The 10-year note could require the district to pay more than $2 million in interest.

"The shame of this is it taints what we did," said Jason Peterson, a Longview bankerwho serves as school board president. "We hired a great staff, got what we needed andtried to provide the best education we could."

District officials claim their former business manager has admitted he failed to make the"Robin Hood" payments but has yet to explain his actions.

"We all want to know why," Superintendent Greg Wright said. "We all want to know whyhe betrayed the school district."

The former business manager, Tim Brittain, resigned in February and now serves in asimilar capacity with the Huffman school district outside Houston. He has not respondedto interview requests from the AP and other media.

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District officials said records relating to the matter were subpoenaed by the HarrisonCounty district attorney's office about two months ago. DA Joe Black, who lost his bidfor re-election on Nov. 2, did not respond to phone messages from the AP.

According to the officials, money for "Robin Hood" was always budgeted and later

shown on the district's books as being paid. Even when the district ramped up itsspending, there was no reason for suspicion, they said.

"Every time we saw expenditures, we'd ask, 'How are you going to pay for it?' and thedistrict would show how they were paying without increasing the budget," Peterson said.

But Carpenter said the dramatic shifts in spending should have "set off alarms" fornumerous district officials, including the trustees and the superintendent.

"There's no way people can hide from culpability in this," he said.

TEA records show that an agency administrator sent Brittain an e-mail last Decembergiving him a "friendly reminder" that Hallsville still owed $6.4 million for 2008-2009. Itwasn't until May that the agency contacted Wright, according to the records.

"It was a perfect storm," Wright said. "If we'd had good integrity from the formerbusiness manager, auditors doing their job and TEA contacting the superintendent,none of this would have happened."