Wind Money Fuels Spending and Benefits in Small Schools, NYT, 11-11-11

New York Times • Posted: Friday, November 11, 2011


BLACKWELL, Tex. — When people complain about the weather here, Abe Gott, the school superintendent, just smiles.

A visit to the campus of the school district of about 160 students shows why. Behind the 1930s-era facade of the Blackwell school 30 miles south of Sweetwater looms a distinctly 21st-century sight: a wind turbine.

Energy development capitalizing on the high winds in the area — which quickly turned sunshine to chill rain one afternoon in late October — has injected sluggish rural communities with new economic lifeblood. More than one local resident has called it the “windfall,” and it has bestowed hundreds of millions of dollars on West Texas schools.

By the 2018-19 school year, Mr. Gott’s district will have received about $35 million from a deal it brokered with a wind farm company in 2005. On the school grounds, $15 million from a combination of bond and wind farm revenue has paid for a new football stadium and academic complex attached to the original school building. About $28 million sits in a foundation earmarked for scholarships;  graduates receive $3,000 for each year they have spent in the district, which they can put toward any type of professional advancement, from a beauty school certificate to a bachelor’s degree.

The influx of wealth has also enabled the district to buy an iPad for every student, starting in the seventh grade.

“What I wanted is, if you grew up in a town of 350 people in West Texas, that should not work against you,” Mr. Gott said. “We can send you to Harvard, we can send you to Baylor, we can send you to Texas Tech — we can send you anywhere because we have the pathway to get there.”

About 69 districts across Texas — mostly rural, tiny schools — continue to benefit from a now-extinct quirk in the state’s school finance law that has led to what some consider an embarrassment of riches. How they spend the money, however, could be a valuable experiment in innovation in public education.

The money comes from a Chapter 313 agreement, which allows districts to offer breaks on property taxes for select manufacturing, technology and renewable-energy projects as part of the Texas Economic Development Act, which the Legislature passed in 2001. The law allowed districts to cap property appraisals so that businesses paid taxes on less than the full value of the property while the state largely offset their resulting revenue loss.

For example, in Roscoe, just up the road from Blackwell, a wind company pays taxes on $10 million instead of on the property’s 2009 total estimated value of $378 million.

According to a 2010 report from the state comptroller’s office, 65 percent of those agreements are with renewable-energy companies, mostly wind farms.

In 2009, the Legislature closed a loophole that allowed districts to negotiate unlimited side deals in which they received direct cash payments in lieu of taxes based on the savings companies received from the state economic incentives. The side deals — and the inequity they perpetuated — led to a public outcry, and now such agreements are held to about $100 per student each year. School districts across the state spend an average of $8,572 to educate a student, according to a Texas Education Agency spokeswoman.

“Schools still get help; counties still get help — they just don’t get as much as they got during the old program,” said Joe Heflin, the former Democratic state representative from Crosbyton who wrote the bill closing the loophole. Even without more money from wind companies, Mr. Heflin said, their presence still helps districts by technically allowing them to lower their taxes by adding more property value on the tax rolls.

Meanwhile, the investments that districts put in place with money from wind deals made before 2009 are beginning to make their mark. Because of programs that the Roscoe I.S.D. started with its supplemental payments, the district received a grant from the Texas Education Agency’s Texas High School Project, making it the first model rural early-college high school in 2009.

Roscoe will receive a projected $11 million over 10 years. It has used the money to build a state-of-the-art academic facility — the Eon Center for Innovation and Higher Education, named for the Canadian alternative energy company that made it possible — and to hire instructional coaches, a new dean and an early-college director.

“What we didn’t want to do is get a two-year grant, and when the grant expires we can’t maintain the program,” Kim Alexander, the superintendent, said, adding, “Without the wind company, we would not have had the means to even enter into the early-college arena.”

As an early-college school, Roscoe joins a handful of Texas schools that partner with local community colleges to let students begin taking college courses in ninth grade instead of in their junior year. Students can graduate with an associate’s degree at no additional cost.

The goal, Mr. Alexander said, is for 90 percent of Roscoe students to do that by 2015.

It is an undertaking made much more daunting by his projection that by that year, 90 percent of Roscoe students will be from low socioeconomic and English-language-learning backgrounds, making them some of the most challenging — and expensive — to educate.

As the program continues, the district, which has 369 students, is keeping track of its methods in the hope that they can be replicated elsewhere. “We think it’s going to be a significant way to develop a model to break the poverty cycle,” Mr. Alexander said.

Moving forward, there are signs that even in their current, more limited form, Chapter 313 deals may be endangered. Late last year, the comptroller’s office released a critical report, saying the supplemental payments, even capped, may be an incentive for districts to enter into agreements that do not benefit the state. The report recommended ending such payments.

Dan Casey, a school finance expert whose consulting firm represents school districts in Chapter 313 deals, said he expected “substantial scrutiny” on all of the state’s economic incentive programs before the next legislative session, though he added that he thought the changes carried out in 2009 had already taken care of many concerns about the law.

For now, the new future of Chapter 313 money can be seen in Haskell County, the birthplace of Gov. Rick Perry, about 90 miles north of Roscoe, where the district is in the initial stages of an agreement that would mean approximately $60,000 more for the local schools.

The increase in property value could also make the Haskell district a Chapter 41 school, said Bill Alcorn, the district’s superintendent, meaning it would need to begin sharing its tax revenue with the state through Robin Hood laws. Still, Mr. Alcorn called the contract a “plus-plus” for the district.

“It may not be as lucrative as it was some years ago,” he said, “but it’s in the contract that we will in no way be worse off than what we would have been without it. It gives us options of floating a bond, building something, letting the wind farm company pay for some things.”