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Finance Reforms Give Rise to School Foundations

IN Alamo Heights, a wealthy suburb of San Antonio, the school district is feeling the impact of the latest round of Texas school-finance reforms.

Although local property taxes have gone up 36 percent, the Alamo Heights School District has cut its budget by $1 million, and $5 million in property taxes has been given to poorer school districts in the county.

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"We were spending the national average [of $5,500 a year] per pupil just a few years ago," says Charles Slater, superintendent of schools in Alamo Heights. "Now we're spending $4,800."

This is the result of a "Robin Hood" plan for equalizing funding between rich and poor public schools.

Although it has been declared unconstitutional by the state supreme court, the law will remain in effect until the legislature comes up with a new plan.

Meanwhile, wealthy school districts, such as Alamo Heights, are finding creative ways to compensate for lost funds.

When the district had to eliminate its swimming program, swimmers and their parents desperately searched for a way to keep the pool open.

"A creative solution was to lease our pool for free to the YMCA," Mr. Slater says. The YMCA sold more than 200 memberships for the pool and uses the facility for their own programs.

At the same time, the parents and swimmers raised money to keep the school swimming program going. "As long as they had the pool operated by the Y, they made it through the year with the money they raised," Slater says. "That's a positive and creative response."

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Private funding is being solicited for more than just extracurricular activities like swimming, however.

The Alamo Heights Foundation, an independent nonprofit group, raised more than $100,000 last year through a direct-mail petition to the entire district.

"Parents made it clear that they're willing to pick up the slack and use private money for things we need," Slater says.

The Alamo Heights Foundation was created in 1973 to manage college scholarship funds. But as the financial climate has changed, so has the mission of the foundation.

"When I came in '87 we expanded the mission to help provide staff development funds. We described it as a way to keep Alamo Heights on the cutting edge so that we could provide the latest in training and development of teachers," Slater says.

"After this last round of cuts," he says, "we established a third mission, which was basic support for the school system." Foundation funds have been used for computers, library books, and classroom materials.

Across the United States, many school districts have turned to local education foundations as a source of funding.

"Nobody knows exactly how many school foundations there are," says Dan McCormick, president of Educational Foundation Consultants, a Williamston, Mich., company that helps districts establish independent foundations. But out of the 16,000 public school districts nationwide, Mr. McCormick estimates that there are between 1,200 and 1,500 foundations.

Although most are in districts of above-average wealth, some foundations exist in "traditional blue-collar strongholds where the corporate and business leadership recognizes the need," McCormick says.

Critics of education foundations argue that they undermine efforts to equalize funding between rich and poor districts.

On the other side of San Antonio from Alamo Heights, the Edgewood School District doesn't have a foundation. It was here that the original lawsuit challenging Texas finance laws began. The prospect of raising money from the district's mostly poor residents is slim, says Craig Foster, executive director of the Equity Center, a coalition of poor school districts in Texas.

"Symbolically, it can be a real irritant," Mr. Foster says of the wealthy districts who raise private funds to make up for losses. But, he says, "you can't run your public schools on foundation grants."

In most cases, the amount of money raised by foundations is not large enough to make a substantial difference, proponents and opponents agree.

"We have a budget of $20 million," Slater says of Alamo Heights schools. "A tenth of 1 percent [which is the amount raised by the foundation] isn't going to provide adequate funding."

"Where the foundation has its impact is the fact that the dollars it does raise are usually applied directly to benefit students," argues McCormick. "The average school district has about 3 percent of their total budget in discretionary funds. The foundation supplements that."

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