More state money should mean lower tax rate hike

info@islandpacket.comJuly 10, 2012 

Beaufort County School District officials got some good news in Gov. Nikki Haley's veto message last week.

In this case, no news was good news. Haley was silent on line items in the state budget that brought the school district an additional $2.2 million for this fiscal year.

Total state funding increased from $73.9 million last fiscal year to $76.1 million this fiscal year. That includes state reimbursement for property tax revenue lost to tax relief.

It also should be good news for property owners who pay school operating taxes. The district got the go-ahead from County Council to increase its tax rate by two mills this year to help pay for a new iPad program. But district officials also indicated they would revisit the increase if the district received more state funding than expected. They had already budgeted a $1.3 million increase, so no veto from Haley means an additional $900,000 not accounted for.

It's not clear how the additional state funding might affect the tax rate increase, but school district officials said they could take it up at next week's school board meeting. Board members would do well to bring down that increase as much as possible.

During budget discussions this year, the amount of money one mill would raise for school district operations was estimated at $1.2 million. That means a two-mill increase would raise about $2.4 million if that estimate holds up.

In the meantime, we say thanks to state Sen. Tom Davis for his hard work to get more money for the school district. Davis has been fighting an inequitable and outdated Education Finance Act formula that is supposed to send state money to a school district based on that district's tax-raising ability. But some districts are able to game the system by keeping valuable property out of the equation through replacing property taxes with fees, used as business incentives, while districts, such as Beaufort County, get little or nothing.

The state's property tax relief law also prevents districts from taxing resident homeowners for school operations, even as those properties are used to calculate their tax-raising abilities. Unfortunately, lawmakers did not adequately account for such a substantive change in how school districts can raise money, and the promise to make districts "whole" has fallen short for districts like ours.

Davis has worked to change how a district's tax-raising ability is figured given the loss of resident homeowner property taxes for operations. The result for Beaufort County was $1.3 million this fiscal year, up from $596,000 in the 2011-2012 fiscal year and zero in the four years before that. He also pushed to stop the state from using the EFA formula for other areas of state funding.

But, Davis says, he's fallen short in achieving overall education funding reform. Funding still doesn't fully take into account the impact of owners switching from a 6 percent assessment rate to the 4 percent rate and thus avoiding school operations property taxes.

He recognizes and expects to continue the piecemeal approach he's had to take even as he works for comprehensive reform. It's not perfect, but it's getting us closer to the goal of equitable funding.

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