State lawmakers grilled testimony and occasionally expressed doubt over the specifics of the volunteer tax-exempt organizations that were established to support public school districts during hours of testimony on Texas ‘ training foundations.
The Barbers Hill Education Foundation ( BHEF), which reports the largest investments of educational foundations in the country, was the subject of a special receiving held by the Texas House Select Committee on Governmental Oversight on Wednesday.
Although the Barbers Hill Independent School District ( BHISD ) has fewer than 8, 000 students and has a$ 151 million annual budget, it still receives significant revenue from a Chapter 313-reformed state tax abatement program.
The Texas Public Policy Foundation’s Mandy Drogin told the council that the foundation received about$ 133.7 million in the 2024 assessment and that BHEF had a$ 200 million fund balance last year.
Greg Poole, the executive director of BHEF and the director of BHISD, has defended the payments to BHEF as a means of avoiding recover, the state’s distribution of tax income from property-wealthy public school districts to underprivileged ones.
The board of directors of BHEF also faced scrutiny because three elected BHISD directors, as well as the ISD’s assistant superintendent of finance, are also members. Nathan Watkins, a panel member for Americus Holdings, a business that BHEF has purchased true estate from, is also a vice president.
Poole was questioned by many lawmakers regarding the composition of the BHEF table and Commerce Street Holdings, the company that manages its investments.
State Representative Ellen Troxclair (R-Lakeway ) questioned Poole about how he had handled Watkins ‘ alleged conflict of interest.
” It was his responsibility to make a conflict of interest known,” Poole said. He kept that secret. He doesn’t have one if he didn’t, either.
After Poole claimed no one in his home worked for Commerce Street Holdings, which handled$ 200 million in assets for BHEF, the issues between Troxclair and Troxclair sparked an odd change.
Troxclair questioned him after a protracted pause about whether he knew Hillary Poole, who is Commerce Street Holdings ‘ vice president of administrative business development, was related to him.
You asked if she did, but you didn’t. She doesn’t, Poole responded. ” If you’re asking, did she respond?” Yes ,ma’am. She did”.
Education foundations are exempt from the Texas Public Information Act and the rules governing open meetings, which led state representative Mitch Little (R-Lewisville ) to question Poole about the board’s composition, which also includes individuals whose businesses pay BHEF in lieu of taxes.
Little referred to that design as “weird.”
It is odd that members of a college board, who were duly elected, are fiduciaries of a nonprofit whose portfolio holdings are kept secret and earn a fiduciary duty to the board, and that the board’s members who are paying property tax are also on the board and the stakeholders of that same organization, Little said.
Little also made note that within BHISD, what would have been a taxable value of$ 8.9 billion was subject to a$ 1.3 billion tax.
EFs can boost personal funds and provide important assistance to public school districts, according to several witnesses.
Foundation Innovation‘s leader, CEO, and proprietor Sean Callaway stated to the committee that the foundations have “real, important oversight.”
In response to a question from Committee Chair Cody Vasut (R-Angleton ), Calloway acknowledged that while the city may get more in benefits than it spends on the basis, it is not” a legal requirement from the state of Texas, but it is the best practice.”
Vasut suggested that lawmakers look into ways to define the best techniques for educational underpinnings.
In the 2026 Republican primary for Texas House District 23, BHEF board member Watkins unsuccessfully ran against state representative Terri Leo Wilson (R-Galveston ), and BHEF sued Wilson for defamation for comments she made during the campaign.
Wilson responded by filing a SLAPP ( Anti-Strategic Lawsuit Against Public Participation ) motion, but the case is still pending in a Texas appeals court. She claimed to The Texan that she has paid nearly$ 90,000 in legal costs and is suing the court to recover it.
Poole stated at the House hearing on Wednesday that he did not believe Watkins had voted in favor of Wilson’s complaint.
The Texas Education Agency opened an investigation into BHISD’s connection with the BHEF earlier this year, but the state company is not a body with authority over educational bases.
