An era of constant construction and renovation is under way at the wealthiest schools around the state, including Tatum and Carthage.

Through an exception to the Texas school finance system, districts the state considers wealthy can hang on to more of their local property taxes by taking on debt for construction and other projects. It’s an exception that is widening the gap between rich and poor schools, according to detractors.

“I don’t blame the people in (a wealthy) district for doing what’s best for their taxpayers and their children,” said Wayne Pierce, whose nonprofit organization, the Equity Center, represents districts the state labels “property poor.” “But the state is obligated to create a system in which one district can’t do great things at relatively low tax rates while another cannot match them, regardless of how high they set their tax rate.”

Carthage ISD

Carthage is the third-richest school district in East Texas, according to the state. It has more than $1.3 million in taxable property for each of its roughly 2,800 students.

Voters earlier this month approved a $15 million bond package for such things as buses, a new high school air-conditioning system and athletic and technology upgrades. Before that, voters approved a $6.8 million bond package in May 2007 to rebuilt Bulldog Stadium.

“By passing the bond, it gives us the opportunity to keep the money in our district,” said Glenn Hambrick, superintendent of the mineral-rich district.

Earlier this year, the district gave the state $18 million as part of Texas’ share-the-wealth school funding system.

While wealthy districts can keep more of their local money by taking on more debt, the money from bonds may not be used for most day-to-day educational expenses, such as teacher salaries. So even as wealthy districts pour millions into new athletic facilities, technology and other projects, they say they are pinched by limits the state puts on local taxes for standard operations.

“We try to keep it as lean as we can because of constraints in our budget,” said Dee Hartt, the superintendent of Tatum schools.

Tatum is the wealthiest district in East Texas. It has a taxable property value of more than $1.5 million per student and has passed five bond packages for a total of $43.1 million in the past eight years.

How it works

Under Texas’ school finance system, the state takes local school property taxes from Tatum and other districts it considers wealthy – based on the taxable property per student – and gives it to poor schools as part of its effort to create an equal, statewide public school system. The amount taken is based on several factors, including tax rates and taxable property values.

Tatum’s tax rate is $1.04 per $100 in taxable value. That includes 37 cents per $100 to pay off voter-approved debt. With approval of the $15 million bond, the Carthage tax rate is $1.14, including 24 cents for debt.

The richest schools in East Texas give away more than 60 percent of the taxes they collect for maintenance and operations.

However, they keep all of the local tax money related to paying off bonds.

Despite the higher tax rates needed to pay off debt, taxpayers in wealthy school districts often don’t see an overall property tax rate increase because the districts lower their operations tax rates to offset the higher debt-related rates.

Many area schools have issued bonds recently to pay for expansion and renovations, but few can do so without raising their overall tax rates.

“It’s one of the inequalities with the funding system,” said Joe Smith, a Lufkin-based schools consultant and editor of TexasISD.com, a Web site that tracks school trends.

The leaders of so-called property-rich districts say their practice is the most responsible use of their taxpayers’ money. Officials from poorer schools agree.

“Everybody finds their ways of how you can better your school system,” said Alan Umholtz, superintendent of the Overton Independent School District. “If you could use the money and keep it in your district, you would.”

Overton is the poorest school district in the Longview area, according to the state. It has a taxable property value of just more than $119,000 per student and a $1.19 property tax rate, which includes 15 cents per $100 for debt payments.

Despite being labeled property-poor, Umholtz said he’s got more admiration than envy for his rich neighbors.

Umholtz singled out Tatum’s Hartt, for praise.

“He’s a great man,” Umholtz said. “He counts every penny.”

Tatum’s boom

A coal-fired power plant accounts for three-quarters of Tatum’s property wealth, Hartt said, and the plant’s appraised value has tripled to $1.7 billion in the past 10 years.

On a recent afternoon, Hartt toured the many new and renovated buildings that were in various states of completion.

“You get a general sense of community pride for the aesthetic of the facilities,” he said.

At the football stadium, a red-brick press box towers three stories above a field of artificial grass, which is surrounded by wrought-iron fencing. An elevator will carry passengers to a hospitality room on the third floor.

“Oh, it’s gonna be beautiful,” Hartt said. “It’s the best in East Texas.”

A three-person crew will operate a new video scoreboard. Nearby, a $4 million facility to house indoor football practices and other functions is in the works. New locker rooms for football players are being outfitted with digital projectors and flat-screen televisions.

“They’ll have satellite TV, but they’re mostly for game film,” Hartt said.

A new coliseum houses Eagles basketball games. Across town, construction crews are building a youth baseball and softball complex modeled after fields at the University of Texas at Tyler.

While those things are quite visible, Hartt said 65 percent of Tatum’s bonds have funded nonathletic expenses, such as campus renovations, classroom expansions, new technology, a fleet of school buses, a community walking trail and other projects.

Hartt was asked whether Tatum would have spent its money differently if the state did not limit how it could be used.

“We’re fortunate,” he said. “We feel our procedures reflect our strategy to allocate resources in a way that we want to.”

Getting by

Under the state’s finance system, poorer schools in East Texas say they are struggling to meet routine expenses.

In recent months, several East Texas districts have used another aspect of the school funding system to get more money from the state. For those districts, which aren’t property-rich, raising the maintenance tax rate as high as voters will allow lets the districts get more from the state. In several cases, those districts also lowered their debt-related tax so voters would see little or no overall tax rate increase.

State Sen. Kevin Eltife, R-Tyler, is calling for changes to the system during the upcoming biennial legislative session, and the Equity Center has put forward its own plan that would increase the state’s funding per student at all schools.

Across Rusk County from Tatum, Overton’s Umholtz said he sliced $140,000 from the budget before the school year began because a decrease in state funding followed a dip in enrollment. Overton is not among the districts that have asked voters to raise their maintenance tax to generate more state funding.

Overton, though, finds creative ways to meet school needs, Umholtz said.

Umholtz said he’s proud of the district’s state-of-the-art elementary building that was renovated in recent years. A new high school was constructed a year ago.

“Our library is gorgeous, and it’s in the old ag building,” he said.

A charitable foundation has given money for numerous projects and services, and it donated an old church that is used for school board meetings. The foundation also helps cover the district’s cost to provide school lunches.

Inmates from a local prison built a concession stand, and patients in a drug rehabilitation facility perform maintenance on the weekends.

They often bump into school board members doing repair work, Umholtz said. But many repairs fall beyond Overton’s means, he added.

“That’s just sad,” he said, pointing to a particularly rusty awning outside the basketball gym. “But it would cost us an arm and a leg to fix it.”

At the football field, fences and the stands appear to have been built in the 1930s, Umholtz said. Instead of an elevator, an aluminum ladder leans against the top floor of the Mustangs’ press box.

Umholtz said the school board will soon ask voters for extra funds. He would like to expand the cafeteria and construct a student activities building.

“I’m thinking the bond will pass because our community wants us to look better. They know what shape we’re in,” he said. “People here in town, if I ask them, if I need something, they find me the money.”

Academics

In the end, at least one measure shows a mixed result for the effect wealth has on academic achievement.

For the past two school years, the state has rated Overton as an acceptable school district. That rating, the third on a four-step scale, is based largely on students’ progress on the Texas Assessment of Academic Skills.

Carthage also has been rated academically acceptable for the past two school years. Tatum has been a recognized district. The highest ranking is exemplary.

While no one faults wealthy districts for doing what they can to hang onto their tax dollars, Pierce said, their practices are harming other schools’ ability to educate their students.

“It’s a tax on the children in lower-funded districts, because it taxes them on their future,” he said. “Texas does not have the kind of money that it can afford not to make every dollar count. Schools should not be using these tactics to get money outside the system.”

* * * *

TATUM

Enrollment: 1,400
Wealth per student: $1,515,536
Fund balance: $3.65 million
Tax rate: $1.04
Tax base: Luminant’s coal-fired power plant accounts for three-quarters of Tatum’s property values. Twenty percent of values come from oil and gas, and the remaining 5 percent is residential.
State impact: “We’re fortunate. We feel our procedures reflect our strategy to allocate resources in a way that we want to. But if the plan doesn’t change (to increase funding as school budgets increase), we’ll be operating in a deficit in seven years.” – Dee Hartt, superintendent
Economically disadvantaged students: 56.5 percent
At-risk students: 37.8 percent
Dropout rate: 9.5 percent

* * * *

OVERTON

Enrollment: 528
Wealth per student: $119,014
Fund balance: $622,181
Tax rate: $1.19
Tax base: Mostly residential property values. “None, that I can think of.” – Alan Umholtz, superintendent
State impact: The school relies on state funds, but it received 23 percent less this year because of a drop in enrollment. “We’re making it, but I had to cut $140,000 from the budget.” – Umholtz
Economically disadvantaged students: 54.5 percent
At-risk students: 39.3 percent
Dropout rate: 19 percent

* * * *

CARTHAGE

Enrollment: 2,795
Wealth per student: $1,316,668
Fund balance: $7.45 million
Tax rate: $1.14
Tax base: Minerals, in particular natural gas, comprise the majority of the district’s values.
State impact: “The current financial plan is working OK for CISD. It could be better, since we send more than 50 percent of our local tax revenue back to the state.” – J. Glenn Hambrick, superintendent
Economically disadvantaged students: 43.4 percent
At-risk students: 46.5 percent
Dropout rate: 1.3 percent