SAN ANTONIO – Eight rural South Texas school districts helped by tax revenues from the Eagle Ford shale energy boom have been designated under state standards as “wealthy,” meaning they may have to surrender some of that money to poorer districts.
School officials said the change in designation was unfortunate since the districts were just beginning to see their finances improve.
“I’ve lived here for 40 years, and we’ve been poor for 38 of those years,” said Deborah Dobie, superintendent of the Carrizo Springs Independent School District.
Property tax values in the district went from $441 million in 2010 to nearly $2.5 billion this year.
Likewise, in the 1,200-student Cotulla Independent School District, property values jumped from $534 million in 2010 to $2.3 billion this year. But the news isn’t all good.
Cotulla Superintendent Jack Seals said equally booming wages mean he can’t compete with the pay to fill jobs as school custodians and cafeteria workers.
“It’s really hard to try to compete with the private sector at this time because the oil field wages are skewing the competition rate,” Seals said.
In addition, oilfield workers are gobbling up housing, so three Cotulla school employees are living in trailers on school property.
The boom has been fueled by hydraulic fracturing, which produces oil and natural gas, and higher mineral rights taxes.
Dobie said that under the Texas system of sharing rich districts’ tax money with poor districts to help reduce disparities, she expects her district to deliver $8 million or $9 million to the state next year.
“But overall, in general, it’s a blessing,” she said. “Anyone that wants to work in Dimmit County can work, and I’m very grateful for that.”
Dan Casey, a partner with school finance experts Moak, Casey and Associates, warned fluctuating property values in the oil patch could create problems. The state uses prior-year values to determine how much “wealthy” districts must surrender, so a sudden drop in value might not be accounted for since the so-called recapture rate would be based on the previous year.
“The main problem you get is these guys that shoot right up and then shoot back down,” he said. “As a result, you tend to get hit harder with recapture costs.”
Seals predicted his district would have to give up as much as $15 million next year, saying it would “hit us like a hammer.”