The Education Debt Industrial Complex 2: The Fast Growth Debt Coalition

Recently, we reported on how school administrators, education vendors, and construction companies cooperate to influence ISD bond elections in favor of education debt. However, you might not be aware of the incestuous relationships between some elected officials and the interests that stand to reap windfalls from ISD spending and debt.

Looking back at major bond elections, notable examples of this collusion are flagrant and widespread. Major backers of pro-bond PACs all across the state were the very same companies that later bid on projects financed by the bond debt.

One organization in particular perfectly embodies this “Educational Debt Industrial Complex.”

Meet the Fast Growth School Coalition (FGSC). The FGSC is an unholy alliance of pro-debt special interests, school administrators, and taxpayer-funded lobbyists that stand ready to feed from the ISD bond money trough.

The stated purpose of the FGSC is to substantially increase spending on school facilities. As a part of this, the main legislative priority of FGSC is to repeal the few debt and tax limits set on ISDs by Texas state law. Proponents of these measures ignore a salient fact of public education in Texas: the explosion of top-heavy, bureaucratic growth in our ISDs. Over the last decade, education spending in Texas increased so rapidly that it far outpaced inflation and enrollment.

An entire page of the FGSC website downplays the fact that Texas has the second highest local debt in the nation. Furthermore, the FGSC attempts to undermine research done by the State Comptroller highlighting the local debt crisis by accusing the state’s chief financial officer of “over-simplifying.” [sic] As if Texas’ soaring local debt could be anything other than patently self-evident.

Diving deeper into the membership of the FGSC, this organization is tailor-made to increase ISD debt. Bringing together all the necessary components of the Educational Debt Industrial Complex, the corporate partners section of the FGSC includes virtually any and every vendor that would be needed to finance, design, build, and outfit a school. From architecture firms and construction companies to textbook publishers and educational public relations consultants, with the FGSC corporate partners webpage, ISDs wouldn’t even need a phonebook for any future crony spending needs.

FGSC also represents partners that offer a variety of taxation and debt services to local governments and ISDs including a law firm that offers assistance with Texas School District Property Tax appeals as one of its many government-oriented legal services. Some bankrollers of FGSC are literally bankrollers—investment firms that work in public finance. Every financial services corporation involved in the FGSC boasts its experience and services in public finance, no doubt to be first in line to hold the ISD bond debt when it is issued.

It is no coincidence that well-known education lobbyist and daughter of the current Chairman of the State House Committee on Public EducationDr. Michelle Smith of Hillco Partners—is the executive director of FGSC. Hillco Partners is the favored taxpayer-funded lobby firm representing many large Texas cities and school districts in the capitol. With these influential friends, the FGSC is especially well suited to profit from local debt.

Expect a lot of talk leading up to next session from fiscally reckless legislators about the need to remove spending and debt restrictions from ISDs who want to collude with interested parties to line their pockets—they’re on the same team—the Fast Growth Debt Coalition team.

These crony relationships and poll manipulation by ISD officials ensure that the deck is clearly stacked against Texas taxpayers. Current incentives are such that local leaders have a large incentive for bad behavior with little accountability. Removing state restrictions on ISD taxation and debt are a step backward for limited government in the Lone Star State. Citizens should be aware of the collusions between their ISD leadership and the interests that seek to profit off local debt dollars. Texans must stand against the Education Debt Industrial Complex in whatever form it takes, including the Fast Growth Schools Coalition.

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