Act 388 effects have 'reached a tipping point' for Beaufort County school budget, local leaders say
Beaufort County Council and school board members might have butted heads over school funding this summer, but they agree a broken state law is at the heart of their discord.
This afternoon county and district officials will sit down to discuss what state-level and local solutions they can support to fix the law and its adverse effects.
Officials also have invited members of the local legislative delegation and municipal governments. They will meet at 4 p.m. at the Bluffton Library at 120 Palmetto Way.
Leaders point fingers at Act 388, a 2006 state law that prevents the school district from taxing primary residences for operations. The law instead taxes only owners of second homes and commercial properties to fund school operations.
That has led thousands of second homeowners to claim their house in Beaufort County as their primary residence -- significantly reducing their own property tax bills, but also shrinking the tax base for school operations, county and school leaders argue.
Now the effects have "reached a tipping point," causing the budget disruptions that left the school district more than $5 million short last school year, officials say.
About two of every three homes in the county is a second home and taxed for school operations, according to Assessor's Office data. That's down from 10 years ago, when three of every four homes was a second home.
That trend creates a Catch-22 for the county, Council Chairman Paul Sommerville has said.
Fewer second homes means the county has to raise the tax rate to raise the same amount of money, Sommerville said. But raising the tax rate incentivizes those second homeowners to claim their house as a primary residence for the tax break, exacerbating the original problem, he contends.
Local leaders see a handful of solutions to combat those effects, and they will discuss which are most effective or practical this afternoon.
At the county level, council could consider a new local-option sales tax or impact fees to raise extra cash for the district.
At the state level, legislators could push for comprehensive tax reform, which all local leaders have said would be highly unlikely to pass.
However, legislators could push for smaller changes, such as sunsetting certain tax exemptions, removing a rule that caps how much a tax rate may increase, or fully funding schools on a per-pupil basis.
Follow reporter Zach Murdock at twitter.com/IPBG_Zach.
Related content:
- Tax rate process too wrapped up in politics, officials say , Sept. 28, 2014
- Beaufort County Council stands firm on school tax rate, Bailey Bill despite school pleas , Sept. 8, 2014
- Faulty projections put Beaufort County schools in $4 million hole , April 5, 2014
This story was originally published October 2, 2014 at 11:13 AM with the headline "Act 388 effects have 'reached a tipping point' for Beaufort County school budget, local leaders say."