Education Funding

Gulf Coast School Officials Eye Oil Spill Compensation

By Alyson Klein — July 13, 2010 3 min read
Mickal Vogt uses a stick to place tar balls in a jar that washed up on the shore in Orange Beach, Ala., on June 12. Large amounts of the oil from the Deepwater Horizon have battered the Alabama coast, leaving deposits up to 6 inches thick on some areas of the beach.
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State education officials throughout the Gulf Coast, worried about economic fallout for already-strained K-12 coffers from the massive BP oil spill, are weighing whether to seek reimbursement from BP to make up for it.

Meanwhile, at least one top school official has raised the specter of health concerns for students in schools near the oil-tainted gulf—and even the prospect of relocations.

“This has the potential of having an impact equal to some of the many [hurricanes],” said Tom Burnham, the Mississippi state superintendent. “It’s just a different kind of storm.”

Already, a marked decline in tourism since the spill began in April has squeezed a major source of revenue for the region, officials say, and added to the strain on fragile state budgets. The disaster also is expected to affect both sales and income taxes, key funding sources for schools and states.

Alabama state education officials have announced plans to request reimbursement from BP, and some officials in Florida, Louisiana, and Mississippi say they may do the same.

The company agreed last month to set aside $20 billion in escrow to compensate victims of the environmental disaster. The fund, which was created in negotiations with the Obama administration, would be used to compensate businesses and individuals affected by the spill, which resulted from an April 20 explosion on a deepwater oil-drilling rig.

Crude oil from the Deepwater Horizon oil spill washes ashore in Orange Beach, Ala., earlier this month.

But it’s still unclear whether that funding will include money for affected states and school districts. The money could be used to reimburse state and local response costs, according to a White House fact sheet. School districts are not specifically addressed.

On the company’s website, BP outlines a claims process for local governments. The company lists both loss of revenue and the cost of additional government services among the claims it will consider. That information likewise does not specifically mention school districts.

“There’s a massive claims process, and anyone with valid claims will be considered,” Tristan Van Hegan, a spokesman for BP, said. He could not say whether school districts would be considered businesses.

Still, Alabama state schools chief Joe Morton has made it clear that he expects BP to pick up the tab for lost state revenue—and lost tax receipts to the state’s Education Trust Fund. He said he plans to file a claim with BP—and will take legal action if necessary.

Health, Revenue Concerns

In Mississippi, Mr. Burnham said some of the schools in the Gulf Coast area are located close to the water, meaning that it is possible to see the Gulf of Mexico from the school building. That has him worried, for instance, about children with asthma. He has met with local superintendents and asked them to prepare for the possibility that they may need to relocate certain students, or even entire schools.

In Louisiana, meanwhile, state schools Superintendent Paul G. Pastorek said the Pelican State is still considering whether to ask BP for reimbursements.

“Given the potential impact of the oil spill on state revenues through the collection of sales taxes and state income taxes ... the [state education] department’s ability to support public schools throughout Louisiana may be affected,” he said in an e-mail.

Mr. Pastorek also said districts in the Gulf Coast area could face a steep decline in local sales-tax revenue, which accounts for more than a third of the total dollars spent on pre-K-12 education in Louisiana.

The Louisiana School Boards Association plans to urge Mr. Pastorek and other leaders to press BP for the funds, said Lloyd Dressel, the director of finance for the school boards’ group.

A version of this article appeared in the July 14, 2010 edition of Education Week as Gulf Coast School Officials Eye Oil Spill Compensation

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