FRANKFORT — Over the last five years, state Rep. Keith Hall, D-Phelps, has earmarked at least $120,000 in state funds for the "Phelps History Center" in Pike County.
There is no Phelps History Center, as such. In the original budget request, Hall said Phelps High School would use the money to teach local history by producing "historical narratives and plays." The focus is on academics, Hall wrote.
"This funding will greatly enhance the Phelps students' knowledge of arts and humanities, thereby increasing their knowledge and greatly improving their test scores," Hall's request stated.
A Herald-Leader review of spending records shows that roughly half the $117,770 spent so far — all from coal-severance tax dollars — went not to academic projects for the school's 430 students, but to sports gear, including basketball and volleyball uniforms, basketball micro-fleece travel outfits, a mascot costume and Nike and Adidas sneakers.
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Thousands of dollars more went to ice cream snacks, jazz shoes, hair ribbons in the school colors of blue, white and grey and various paper, hardware and electronics supplies for the school, some of which school officials recently said they could not account for.
Although the sums involved are relatively small — Kentucky's state government spends $9.1 billion a year — critics said this is an example of how public money is used in the little-noticed "pet projects" that lawmakers tuck into every state budget.
"If we're setting aside money for more educational spending, great. Let's step back and have an open, transparent discussion about the needs of the school districts and where this might be invested. But that's not what happened here," said Bob Sexton, executive director of the Prichard Committee for Academic Excellence.
"Obviously, sports and team mascots and school colors are important, but they're not the core mission of our schools, and they're not what we need to be spending our tax money on," Sexton said.
Hall, the lawmaker, said he hasn't closely followed the Phelps History Center spending at the local level, but he resents criticism of how he earmarks state funds in his House district.
The money comes from coal-severance taxes, which originate in Eastern Kentucky and ought to stay there, he said.
"The way I look at it is, anything that enhances the quality of life in those communities, I'm in favor of doing it," Hall said. "And let me tell you something else. We in the mountains don't take too kindly to people telling us how to spend our money."
'We share things'
Phelps High School officials largely defended their use of the funds.
About $27,000 went to buy a stage, lighting and sound equipment for the school's gym, according to spending records.
Officials said several of the subsequent plays have been historical, including one about the 19th-century Hatfield-McCoy feud, which happened nearby, and another, a Christmas play, that incorporated the history of Phelps. However, the student productions have leaned toward peppy musicals. Grease is a recurring favorite.
The school bought sports gear using the money because some plays had a sports theme, said Debbie Stiltner, a history teacher and girls' athletics coach who helps oversee the project spending.
For example, Stiltner said, this year's spring production had a scene from Disney's popular High School Musical that featured basketball players. That required the school to buy a set of basketball uniforms for the actors, she said.
The uniforms — in Phelps High School colors — are now "on loan" to the basketball team, she said. The same is true for the volleyball uniforms, the mascot costume and other sports-related items purchased for plays and then transferred for use in athletics, she said.
"We're a small school and we share things," Stiltner said.
Stiltner and school principal Mike Hamilton said they disagreed with the way some purchases were described in spending records, including the school's own purchase orders and attached store receipts. The Herald-Leader got copies at the state Office of Local Government, which disburses coal-severance funds, in Frankfort.
For instance, an April 2006 purchase order signed by school officials showed $6,000 going to Big Dog Warehouse of Pittsburgh for a set of 24 lockers for the girls basketball team, to be delivered to the girls basketball coach, Denise Campbell. They were installed in the gym locker room.
Actually, Stiltner said, those lockers were intended to help hold items used in stage productions. The school doesn't have an auditorium or stage outside the gym. The lockers were empty on a recent tour of the school.
A December 2005 purchase order showed $6,360 going to Lowe's Sporting Goods in London for 20 pairs of Nike Shox Lethal basketball shoes and a dozen sets of basketball uniforms in the school colors, as well as hooded sweatshirts and duffel bags. The purchase order and receipt said the items were bought for the boys basketball team and delivered to the boys basketball coach, Clay Campbell.
Stiltner said the shoes and uniforms were originally used in play productions. School officials said the money is not meant to directly benefit the athletics program.
"Back in '05, that's the first time we've ever gotten any coal-severance money," Hamilton said. "We've tried to be frugal about it and not try to buy things that are used just one time."
Stiltner said she kept other purchases using the money for her own use with students. This includes $1,000 in Dippin Dots ice cream snacks — which were treats for students, she said — and $4,365 in Smart Board technology (an electronic blackboard) that she said she uses to teach. A laptop computer that she said she used with students cost about $1,000, but it broke and had to be replaced two years later with a new one, she said.
Neither Stiltner nor Hamilton could explain why cases of paper and a mechanical desk-lifter ordered for the school's janitorial department were bought with the money. The pair said they don't know why the money would be used for everyday items like that, and they don't know what happened to those items.
Spending coal money
Critics say ice cream and basketball jerseys are not what coal-severance money is intended for.
The state legislature created coal-severance taxes in the 1970s to compensate coal-producing counties for the loss of a natural resource. The funds were to be spent on economic development, to diversify Eastern Kentucky's economy as the coal industry gradually employed fewer people.
Three decades and hundreds of millions of dollars later, coal-severance money is spent for all sorts of things. Knott County, for instance, in a project the state auditor criticized for "serious mismanagement," sank $1.2 million into digging a small, non-functioning swimming pool only 4 feet deep.
Jason Bailey, an economist with the Mountain Association for Community Economic Development in Berea, said lawmakers who spend coal-severance money with no serious objective do Eastern Kentucky a disservice.
"We've definitely lost any larger strategy for investing these dollars, and that's a loss for the coalfields," Bailey said. "Instead of money going to investments that make the most sense, like better infrastructure or education, it goes into the pet projects of whatever lawmakers have the most clout. And it won't be that long before this money isn't there anymore."
Hall, a member of the House budget committee, said he is a longtime supporter of his local schools. The Phelps History Center sounded like a great idea because it would teach young people about their community and let them perform on stage, he said.
"We feel like the children of Appalachia, who have no ways or means, need a way to recognize their talents and their heritage," Hall said.
In 1999, Hall — who refereed basketball at Phelps High School — resigned from the Pike County school board. At the time, the state Education Department was investigating him for allegedly trying to influence school district hiring. The former schools superintendent and others had filed complaints against him.
Pike County voters elected Hall to the House the next year.
Apart from the money he earmarked for what he called the Phelps History Center, Hall in 2008 set aside $90,000 in coal-severance funds for Phelps High School to improve its athletics facilities. Records show that all but $544 of this has been spent on items including gym improvements, a John Deere utility vehicle, bleachers, field equipment, a public address system for the football field and an upgraded press box.
Hall said he does not follow how earmarks are spent. He said he's attended a few musicals at Phelps High School, including one in which his daughter participated, but he cannot explain how much of the money that he provided found its way into teaching local history, the purpose he gave in his budget request.
"I appropriate the money. What they do with it is out of my hands," Hall said. "I am not privy to, nor do I know anything about, these expenditures or how any of these expenditures are classified or approved."