Small town school budget takes a hit following private prison purchase

GERONIMO, OK - The purchase of Oklahoma’s last privately operated prison has been considered a major win as a result of the 60th legislative session. However, during the transaction, lawmakers overlooked the potential side effects this could have on taxes and on one small school district’s budget.

In Oklahoma, school districts are funded mostly through ad valorem, or income brought in from property taxes. The important note here is that state-owned facilities do not pay property taxes.

While operating as the Lawton Correctional Facility under The GEOGroup (now named the Red Rock Correctional Center under the state), lawmakers assumed that Lawton Public Schools was the district benefitting from the property taxes being brought in. However, it was found out later in the process that the prison actually resides within the Geronimo Public School (GPS) district. House District 63 Representative Trey Caldwell explained this happened due to an oversight while officials were focused on the prison's purchase and retaining the facility, along with the employees and inmates inside.

“I didn’t find out about that, probably two days before we passed the legislation,” Caldwell stated.

The representative, who also chairs the Appropriations and Budget Committee for the House, played a major role in spearheading the prison transaction. He went on to say the facility made up around 40% of the ad valorem brought in to the district. The area affected the most, according to officials, is the school’s sinking fund as it doesn’t receive any state or federal dollars and is solely sourced locally. This fund is what pays back bonds and other debt. At the moment, the district has around three years remaining on the current bond in place.

"Sometimes decisions are based on benefiting the most, I completely understand this and thank Representative Caldwell for representing southwest Oklahoma very well," said Geronimo Superintendent Bill Pascoe.

Geronimo is one of the smaller districts in Southwest Oklahoma, made up of around 330-340 students, according to Pascoe. As the city itself is also relatively small, the district gets limited funding as-is. To make up for this shortfall, Caldwell said the state responded quickly and has already put together a plan. In simple, the State of Oklahoma will step in and pay off the school's current bond. Officials stated the district will lose around $100,000-$150,000 out of its sinking fund as a result of this prison purchase. Geronimo Public Schools is made up of around 330-340 students, according to Pascoe.

In total, the district would have lost around $600,000. However, Caldwell went on to explain that other formulas are in place to substitute the losses in the school's other funds. Since the purchase didn’t happen until later in 2025, the district will still get a majority of this year's property taxes, around 2/3 of its estimated ad valorem.

While this year’s session has come to an end, the legislation has been drafted and agreed upon amongst state officials to pass in the next session. Currently, there is nothing in place to help substitute any loss of funds from state purchases. This plan not only substitutes the loss of funds, making sure Geronimo’s quality of education and growth isn’t stunted, but also addresses any similar situations from happening in the future.