State to AISD: Pay back $8.5 million
By GREG MAY and ERIN MOSELY
The state of Texas is demanding that the Alvin school district give back $8.5 million that it says it overpaid the district over the past five years.
District officials have appealed to the Texas Commissioner of Education Robert Scott.
The overpayment resulted because when the state calculated AISD's revenue, it didn't correctly factor in the district's participation in a tax increment reinvestment zone in burgeoning Shadow Creek Ranch, said Tommy King, the district's acting superintendent.
"They've come back now and said, `We've overpaid you over the last five years,'" he said.
As a result, the state's payments to the district will shrivel this summer, he said.
``We're having to pull out of reserves," King said.
Alvin school district board chairman Pete Vincent said the district intends to contest the payback because it was an error on TEA's part and not Alvin ISD's.
The state overpaid a total of about $65 million to the 20 some districts in Texas that have TIRZ contracts, King said.
Lisa Dawn-Fisher, the state's deputy associate commissioner for school finance, said the fault rests with school districts that failed to report TIRZ revenue accurately.
Dawn-Fisher said: Our position is we have instructed school districts how to report (TIRZ payments) properly for over 10 years. We have had instructions to schools in their reporting of their audit and a schedule for them to report their TIRZ payments, and that's been in place since 1999."
The TIRZ in question, Pearland Tax Increment Reinvestment Zone No. 2, was created in 1998 when Shadow Creek Ranch was mostly undeveloped land.
The entity, which also includes participation from a drainage district, the city of Pearland and Brazoria County, was created as a way to pay back the Shadow Creek Ranch developer for upfront costs to build infrastructure. As the community grew, 25 percent of the resulting additional property tax revenue has gone to the developer.
Discovery that districts were being overpayed occured after a state law was approved to reimburse TIRZ entities hit by revenue losses in the 1990s when the maximum tax rate for school districts was decreased by 50 cents to $1.50 per $100 valuation.
In addition to delivering an $8.5 million hit, the adjusted revenue calculation means AISD will get $2.5 million less annually from the state that it had expected, King said.
He said the district might consider legal action at some point.
``We would hope we can (resolve this) just by making an appeal to the commissioner," he said.
