School board extends participation in special Hilton Head tax district

February 18, 2014 

Chief facilities construction and planning officer Robert Oetting presents on the status of several recent and upcoming construction projects throughout the school district during the Feb. 18, 2014, board meeting.

SARAH BOWMAN — Staff photo

  • By the numbers

    A survey on The Island Packet's website last week asked readers if they thought the Beaufort County School District should continue to participate in a special tax district to aid creation of a USCB campus on Hilton Head Island? Thirty people responded as of Tuesday afternoon:

    • 18 percent said they were not sure
    • 46 percent said the schools should leave the tax district and collect the full revenue itself
    • 36 percent said the school district should continue to participate

The Beaufort County School District will participate in the extension of a special property-tax district on Hilton Head Island, contributing about $1 million a year for the next 10 years.

The board of education approved the extension 8 to 2 -- with Jim Beckert and Michael Rivers opposing -- and vice chairman Mary Cordray abstaining because she works for the University of South Carolina Beaufort, which would benefit from the extension.

Town of Hilton Head officials have said extending the district, set to expire in December, might help bring a USCB hospitality campus to the island. The 10-year extension also would fund several park improvement projects, town manager Steve Riley said.

Several school board members said they felt those improvements will benefit the school district by raising property values on the island. Others said county schools could use the additional revenue for upcoming expenses and projects, including the construction of two new schools in Bluffton.

Tax increment finance districts are designed to revitalize areas with public works projects that stimulate development, which, in turn, raises property values.

When other governments -- such as the county or a school district -- participate in the TIF, they agree to forgo the additional property tax revenue that results from rising property values within the district.

The municipality keeps this "increment" to pay for the public works projects it hopes will lure developers.

The school district has participated in the Coligny special tax district since it started in 1999, forgoing about $33 million, or more than half of the additional revenue raised during that time, according to Riley.

Under the agreement approved Tuesday night, schools will continue to contribute $1 million annually from its debt millage -- about $3.1 million less than the district's current contribution -- with a cap of total contributions set at $13 million, Riley said.

Laura Bush, Paul Roth and board chairman Bill Evans supported the extension because the amount the district contributes will decrease.

That decrease should help the district cover additional operational expenses expected after the two new Bluffton schools open for the 2015-16 school year, chief operational services officer Phyllis White said.

Annual operating costs for those schools -- a pre-kindergarten through eighth grade elementary school on Davis Road and a high school in the New Riverside area -- are expected to be about $3 million, superintendent Jeff Moss has said.

However, some board members said the school board should end the partnership and collect the full tax revenue to invest in its own programs.

"With the continued development and growth that we are going to be experiencing in the next few years, it is important and imperative to have as big a pile of (reserve) funds as possible to prepare for and fund facilities and programs we will need to service those students," Beckert said at the meeting.

White said the school district has considered those concerns, but feels it has reached a mutually beneficial agreement with the town.

"We're not going to be out any money that we're not used to," White said. "We're actually gaining money with this."

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