High School Stadiums, Packed With Loopholes

Bloomberg Businessweek
Sep. 27, 2012

By Kathy Warbelow on September 27, 2012

Texas isn’t a place you’d expect to see the words “equalized wealth,” but there they are in the state’s education code. The so-called Robin Hood provision passed in 1993 requires that school districts with taxable property values above a certain level, currently $319,500 per student, surrender some of their revenue to poorer communities.

For the 2012-13 school year, a record 374 of Texas’s 1,030 districts are giving up a total of about $1 billion. (In 1993, 35 districts made the list.) Tax money used to repay bondholders is exempt from redistribution, so as the number of towns deemed property-rich has grown, many have raised millions from bond issues to build lavish football stadiums and schools. Nearly 100 high school stadiums have opened in Texas in the last five years. “If you don’t pass a bond and spend it here for your kids, the money just goes to the state,” says Dustin Burns, president of the booster club at Carthage High School, near the Louisiana border.

Voters in some districts have balked at issuing bonds to cover costly new facilities, but school bonds are generally an easy sell in Texas, where a state guarantee prevents default. In the last four elections with bond initiatives on the ballot, voters in two-thirds of 174 districts approved borrowing a total of $5 billion, according to data from the education news site TexasISD.com. Carthage district voters have passed three bond issues totaling $50.5 million in four years, mostly for schools, Superintendent Glenn Hambrick says. The Carthage Bulldogs play in a four-year-old stadium upgraded this year with a $750,000 video scoreboard stretching 1,200 square feet. The scoreboard, a standalone ballot item, won with 69 percent approval in May. Carthage has a schools budget of $23 million this year and surrenders an additional $11 million for redistribution. Carthage High serves 750 students.

Ten Texas high schools now have stadiums with 16,000 or more seats. More than 100 have video scoreboards and more than 500 have artificial turf fields, according to Robert McSpadden, who maintains a database of more than 1,200 gridirons. Educators and debt hawks have criticized the spending spree, especially since state legislators last year slashed $5.4 billion from the two-year schools budget. “We are overbuilding in Texas schools and undereducating our children, and leaving them a legacy of debt,” says Peggy Venable, who directs the Texas arm of the Tea Party group Americans for Prosperity.

Not all bond-issuing communities targeted by the Robin Hood provision are wealthy. In the eastern district of Tatum, which has passed six bond issues totaling $73 million by about a 4-to-1 margin in the past decade, including $16 million for sports facilities, almost 60 percent of the 1,640 students are economically disadvantaged under federal standards, U.S. Census Bureau data show. Incomes and home values of the roughly 5,600 residents are below Texas averages. The state still calls Tatum property-rich, however, because of a Luminant power plant valued at almost $1 billion, about 70 percent of the tax base. Tatum is giving up $6.2 million this school year, equal to nearly half its schools’ operating revenue. The 4,600-seat stadium at the 464-student high school has a three-story press box, and the Tatum Eagles train in an indoor facility with a 70-yard practice field. Superintendent Dee Hartt calls it a way to help keep “local money at home.”

Initially, McSpadden says, the construction boom was due mostly to recent suburban population growth. In Allen, an affluent district north of Dallas, officials focused on building schools as enrollment has grown from 6,000 in 1999 to more than 19,000. In 2009, voters passed by a nearly 2-to-1 margin $119 million in bonds for a stadium, a performing arts center, and a transportation facility. The Allen Eagles now play in the state’s most expensive high school stadium, a $60 million facility with a high-tech scoreboard, Wi-Fi, and 18,000 seats. Superintendent Ken Helvey says of spending critics: “We really don’t consider outsiders. They’re not our voters.”

The bottom line: Texas is redistributing $1 billion in tax revenue that comes from more than one in three school districts this year, a record.

Warbelow is a Bloomberg News contributor.