Beaufort County Council is still massaging its math to determine what property-tax rate will raise $114.9 million for the county's public schools.
Some council members think the 101.7-mill rate set in June should do the trick. But Beaufort County School District officials contend the rate needs to be raised to about 105 mills to account for variations in the county's tax collections.
The difference between the two rates could leave the district fumbling to cut more than $3 million in costs mid-year, as officials did this summer in their current budget to cope with a surprise $4 million shortfall, superintendent Jeff Moss said this week.
Councilman Brian Flewelling is among those urging caution because setting the rate too high could overtax the county's second-home property owners.
The council's Finance Committee will meet to compare its math with school officials at 2 p.m. Monday at the Hilton Head Island library at 11 Beach City Road. The full council is expected to take the first of three votes needed to set the tax rate when it meets at 5 p.m. at the library.
At issue are calculations produced this month by district head of operations Phyllis White and county chief financial officer Alicia Holland that suggest the rate the council established in June won't raise enough money because of variances in the county's tax collections and the number of residents declaring Beaufort County homes as primary residences. Under state law, primary residences are not taxed for school operating expenses.
White and Holland say the 101.7-mill rate unrealistically assumes 100 percent tax collection and doesn't accurately account for potential switches by owners of second homes to owner-occupied homes. For example, more residents might make that switch this year to take advantage of a new law that allows them to declare their homes as primary residences while still renting them for up to 72 days, county auditor Ed Hughes has said.
White and Holland have suggested the council consider raising the rate to about 105 mills.
Last fiscal year, the council lowered the school millage rate, and the district was inadvertently shorted about $4 million. That led the district to cut some positions this school year and hold others open, in addition to using about $2 million from its reserve fund, White said.
Flewelling argues that kind of shortfall is why the reserve exists and wants to keep the 101.7-mill rate. If that turns out to fall short again, the district can safely use its reserves again and continue to zero in on the correct tax rate, he said.
However, Moss worries that paying for recurring costs with another infusion from the reserve fund is unsustainable. County administrator Gary Kubic repeatedly has made the same case for making cuts instead of regularly spending from county reserves for annual costs.
Councilman Bill McBride and Chairman Paul Sommerville support raising the tax rate to ensure the district receives at least $115 million. Councilmen Rick Caporale and Stu Rodman said a rate in between the two proposals could be best.
"I believe at this point in the game, this council has an obligation to set the millage at a level that would give them the dollars we set in the budget," McBride said. "It's only fair."
Follow reporter Zach Murdock at twitter.com/IPBG_Zach.