Beaufort County, school district inch toward resolution of tax-district dispute

rheaton@beaufortgazette.comMarch 26, 2012 

The Beaufort County School District and County Council are close to resolving a disagreement about a special tax district that the school system says has cost it millions.

Conflicting interpretations of the New River tax-increment finance district agreement left the school system shorted by about $20 million over the past 10 years, school officials contend. The tax district was formed in 2002 to finance the University of South Carolina Beaufort and Technical College of the Lowcountry campuses on U.S. 278.

Tax-increment finance districts are designated by county or municipal governments where improvement projects are expected to increase property values and, thus, tax collections. The increased revenue is then used to pay for the improvements.

On Monday, County Council approved a change that resolved one aspect of the three-pronged dispute over the New River district. The school district's contribution to the TIF -- and all county TIFs going forward -- will be taken from sales tax funds instead of from general tax collections.

School officials said the change is important because it affects the way school district tax rates are calculated.

County Council finance committee chairman Stu Rodman said it could ultimately mean higher taxes, but a vote on that would come later. "On the other hand, if we didn't (make this change), we're probably penalizing the school district," he said.

The county already agreed to pay a per-pupil reimbursement to the district for the students who live in the tax district.

One issue remains unresolved. The school district wants the county to guarantee that the district will not lose revenue from the TIF.

Rodman said that resolving that issue, which could mean adjusting the school district tax rate, will be discussed as both the County Council and school board prepare their budgets for next year.

"We're mighty close to the goal line," said school board Chairman Fred Washington, who agreed to the timeline but had hoped to have the tax-rate issue solved earlier. The board's first budget work session is Friday.

Related content

  1. School district asks County Council for compromise on tax district; Jan. 9, 2012
  2. School district's January presentation to County Council on New River TIF
  3. County Council denies school tax hike, approves budget for county operations; June 27, 2011
  4. County, school district at odds over special tax funds; June 23, 2011
  5. School district: Accounting error necessitates tax increase; June 21, 2011
  6. Beaufort County schools shorted $9 million since 2002, district officials say; June 6, 2011

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