Missing Investment Funds Causing W.Va. Shake-Up
The disappearance of $212 million from a West Virginia investment pool formed by school districts, county governments, and the state has prompted an outside audit and legislative demands for greater control.
It has also resulted in the resignation of one of Governor-elect Gaston Caperton's chief aides.
The $1.5-billion fund evidently lost the money in poor investments in 1987 but failed to report it until auditors recently questioned the fund shortage, said Steve Cohen, Mr. Caperton's spokesman. The investment pool reportedly earned double-digit interest rates but generated the high rate of return through risky investments, officials said.
In 1987, the fund was managed by Arthur Margolin, who then held the post of assistant treasurer. Mr. Caperton recently named Mr. Margolin as his chief financial adviser. Mr. Margolin resigned from the post on Jan. 6.
School districts have yet to feel the impact of the missing money, said Carolyn Spangler, spokesman for the state department of education. Reports indicated if the state and local governments were to liquidate their accounts, they would receive only 90 cents on every $1 invested.
To ease pressure on financially strapped farmers, two Indiana farm groups are backing a bill that would replace property taxes with county income taxes as a source of funding for local schools.
The Indiana Farm Bureau and the Indiana Farmers Union both have proposed phasing in a 1 percent county income tax over 10 years. The farm bureau's plan would make the tax mandatory, while the union's would allow localities to opt for the tax.
The proposals, which surfaced but failed to make headway in last year's legislative session, would raise an estimated $45 million for primary and secondary education.
Louisiana's governor says he will seek legislation to withhold state aid from school districts that fail to reduce class sizes in accordance with a new state law.
Gov. Buddy Roemer said many districts are ignoring a provision in last year's comprehensive school-reform act that set a maximum pupil-teacher ratio of 20 to 1 in kindergarten through the 3rd grade.
Mr. Roemer also is expected to ask lawmakers, whose 1989 session begins in April, to tighten state standards for the awarding of General Educational Development diplomas, or ged's.
Minnesota should fund at least half the cost of desegregating the state's largest school districts, according to a consultant's report that has been approved by the state board of education.
The study was commissioned last year by the legislature, which is expected to address desegregation-funding issues during its coming session. Minnesota is one of the few states that fund urban desegregation efforts without a court order forcing it to do so.
The report was written by Leonard Stevens, the former court-appointed monitor of Cleveland's integration program.