Beaufort County has taken another step toward upholding its pledge to the Beaufort County School District that a special tax district created a decade ago to build two college campuses wouldn't hurt the district financially.
It's the right thing to do.
The tax district, which comprises about 3,470 acres in southern Beaufort County, resulted in new campuses for the University of South Carolina Beaufort and the Technical College of the Lowcountry in southern Beaufort County at a cost of about $40 million.
The school district was reluctant to participate in the tax district and give up new tax revenue in the then fast-growing district.
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The agreement struck between the two in 2002 clearly states: "The council and the school district mutually agree that the school district shall not sustain a loss in revenues as a consequence of the New River Redevelopment Plan and the issuance of (tax-increment financing) obligations."
But as with most things in life, the devil has been in the details.
Negotiations have been ongoing for much of the past year after the district asserted it had been shorted about $20 million over the years.
To its credit, the district hasn't been looking for money owed in the past, but wants to make sure it is getting what it is owed going forward.
The county last year agreed to a per-pupil payment owed. State law on tax-increment financing states that if school enrollment increases as a result of a redevelopment plan, then a school district should get a certain amount per pupil.
The county will pay about $8,600 for each of the 148 students who now live in the tax district, which includes the University Park, Oldfield and Riverbend neighborhoods. That totals about $1.2 million.
This past week, County Council signed off on a plan that takes money going to the tax district from the school district's state sales tax reimbursement instead of revenue from property tax collections.
That has a bearing on calculating the school district's tax rate for operations, long a bone of contention between the two. The county must approve that rate as part of the annual budgeting process.
One of the major changes in the past decade has been how school operations are paid for. In 2006, state law removed resident homeowners' property taxes for school operations and replaced that money with revenue from a 1 percent sales tax. The law also capped how much the property tax rate could increase each year.
But adjusting the tax rate to keep the district whole on revenue is what's called for in the 2002 agreement.
Here's what it says: "... upon demonstration by the school district of a loss resulting from the implementation of the New River plan, whether as a result of changes in funding from the state based on any formula taking into account property values or taxpaying ability or from the unavailability of the difference between the initial equalized assessed value and the actual equalized assessed value of real property in the New River Redevelopment District, the county agrees that millage for the school district shall be adjusted so as to replace any such lost or foregone revenues."
We expect a vigorous debate on whether the school district can demonstrate a loss as a result of the special tax district, which must be made up with a tax rate increase. County Council has made a big point of holding the line on tax increases for both county and school district operations.
But we also expect the county to live up to its agreement should the district make that case.