HOUSTON — On Wednesday afternoon, Texas Democrats responded to Gov. Greg Abbott who claimed school district woes are not his fault. Democrats sent a letter to Abbott urging him to work with them to get schools the money they desperately need.
"The governor made claims that are outright false or disingenuous," Rep. Jon Rosenthal said.
Texas Democrats are keeping the pressure on Abbott to call a special session to help districts in serious financial trouble.
"To have our schools struggling, underfunded, massive layoffs, while the state sits on $20 billion or $25 billlion depending on how you count it is unconscionable," Rosenthal said.
Abbott is not on board and blamed district budget problems on the loss of federal COVID-19 dollars and declining student enrollment.
Rosenthal said he doesn't think that's the problem.
"We haven't increased their funding significantly since 2019," Rosenthal said. "The governor is the only one who can call us in for a special session to write some legislation and use some of the surplus money we have on hand right now."
With no movement in Austin, districts like Cy-Fair ISD are pushing ahead with job cuts. HISD also making headlines for its mass layoffs and allegations against Superintendent Mike Miles.
"On the surface, it looks pretty damning, looks pretty bad," Rosenthal said.
A Spectrum News report claimed Miles diverted Texas taxpayer dollars out of state to fund Miles' charter school system in Colorado.
"That to me sounds like horrible mismanagement," Rosenthal said. "If this person [Mike Miles] had any integrity at all, he would resign or step away until an investigation cleared him."
Miles denied doing anything illegal in a live chat with the Houston Chronicle on Wednesday. He said it's how most charter systems operate and he'd welcome a state investigation.
"Let's have TEA or someone look into it," Miles said. "So we can put that to rest, so the people can be, the public can be satisfied."
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Rosenthal said the troubling report coupled with a larger-statewide funding crisis impacting a majority of districts needs to be addressed quickly at the legislature before the fall.
"That's not a partisan issue," Rosenthal said. "Republican parents, Democratic parents, everyone wants a good education for their kids."
Texas Democrats said they're willing to meet Abbott anytime to find a solution. So far, there has been no response from Abbott to the latest letter.
Texas Education Agency Commissioner Mike Morath responded to KHOU 11's request for comment on the Spectrum News report. Wednesday afternoon, he sent us the following:
"Under state law, TEA receives complaints about allegations of violations of law among public schools operating in the state of Texas. You have asked for an investigation based on a news report about Third Future Schools and Mike Miles. However, the news report left out some significant context. I’m writing this letter to acknowledge receipt of your request to review the matter and to note that I have referred the complaint to our complaints team, although as noted below this complaint will involve a review of Midland ISD, Ector County ISD, and Austin ISD.
Third Future Schools is a non-profit 501(c)(3) based in Colorado with an affiliated non-profit 501(c)3 based in Texas, and has a non-profit mission focused on serving low-income students. It is not a charter school operating under Texas Education Code Chapter 12, Subchapter D, approved by the state of Texas, and so does not receive state funds. Instead, Third Future Schools operates schools in Texas with authority granted by performance contracts signed with Texas independent school districts.
The news story referred to three schools. Third Future Schools has run three campuses under performance contracts with Midland ISD, Ector County ISD, and Austin ISD. In all three cases, the districts engaged Third Future Schools to turn around chronically low-performing (i.e., F rated) campuses in those districts. All schools performed at the equivalent of a B within the first rating year of operation by Third Future Schools on behalf of those districts, indicating the non-profit organization has been successfully executing its core obligation for those districts and positively impacting their students.
School districts have autonomy to engage with vendors to provide educational services. As a vendor of the school district, Third Future Schools would have latitude afforded under its contract with each district to spend its funds in service of the contract. Information in the news story discusses administrative expenditures made by Third Future Schools in support of the academic turnaround of the three campuses it was operating for those districts, but no information was provided in the story related to Texas school system fund balance transfers out of state. The limited information included in the news story does not in of itself constitute evidence of a misappropriation of funds in Austin ISD, Midland ISD, or Ector County ISD nor a contracting violation by any of those districts. However, as noted above, we are referring your letter to our complaints team to review the allegation against those districts."
Third Future Schools also released a statement to KHOU 11. It's in full below.
"In light of recent media coverage about Third Future Schools, we want to take the opportunity to set the record straight.
No Texas funds have ever been diverted to subsidize schools in Colorado. Such an action would be in direct violation of our strict financial protocols. Each of our state networks oversees the funds for that state, and they do not cross from one state to the other.
Since our central office is located in Colorado, most paper checks and bills are sent to this location and then deposited into separate bank accounts. Each school has its own bank account. A check meant for a Texas school may arrive in Colorado, but it is promptly deposited into that school’s Texas bank account.
Some of the confusion in the media coverage stems from the fact that the network organization applies administrative fees to all schools in order to provide centralized support services, such as payroll, accounting, human resources, and school leadership. This is standard practice for such partnerships.
Third Future Schools conducts annual independent audits to ensure financial accountability and transparency. All of our audits have been clean – the highest standard that can be met in public accounting.
We take our commitment to financial transparency very seriously. All of our budgets, audits, and board documents can be found HERE.
We have three schools in Texas that over the course of our partnerships have risen from a F rating to a B rating. We are proud of the work by our students and staff on these campuses.
Regarding Mike Miles’ relationship with Third Future Schools, Mr. Miles has not served as the CEO of the organization for nearly a year. He has served as a consultant in a manner that does not violate his employment contract with Houston ISD.
We welcome the scrutiny that comes from running successful schools, and we strive to always operate with the highest standards of governance, transparency, and accountability."