Beaufort County Board of Education officials were "disappointed, but not surprised" Monday after Beaufort County Council members denied the school district's request for a 1.8 percent tax increase to adjust for an accounting discrepancy.
County Council gave final approval Monday to a $174 million budget for the district that did not include any increase in millage, and anticipates the district will have to spend $2 million from its reserves to cover costs.
The council also approved a $96.3 million budget for Beaufort County operations for the fiscal year beginning July 1.
Falling revenue forced the county to cut back in various departments and decrease contributions to organizations such as Beaufort Memorial Hospital, Technical College of the Lowcountry and University of South Carolina Beaufort.
Among the departments hardest hit were public libraries, which cut a total of 66 hours from their weekly operating schedules to reduce the burden on shorthanded staff, council member Steve Baer said.
The $96.3 million budget is about $2 million less than the current year's spending plan, which was originally budgeted at $104 million but reduced to about $98 million because of revenue shortfalls.
School district officials contend accounting rules for a special tax district haven't been followed and requested a tax rate "adjustment" to bring the accounting into sync with state statute and a 2002 tax-increment financing agreement between the county and district.
"It seems to me that honoring contracts is no longer important (to the county)," school board chairman Fred Washington said after council's vote Monday. "I do wish for us to sit down with the county and continue discussing this. ... The board is looking at our options."
In recent discussions, school and county staff agreed that the school district should be receiving $8,600 for each pupil who lives in the New River TIF district, formed in 2002 to finance two college campuses on U.S. 278 -- the University of South Carolina Beaufort and the Technical College of the Lowcountry.
When it was created, the district contained no students. Today, it has 148.
County Council amended the district's budget Monday to include the $1.276 million in TIF revenues.
However, the district and county continue to disagree on another aspect of the TIF.
About $2 million that the district pays into the TIF fund has been taken from its general tax collections. District officials contend it should have come from its state allocation. District officials had said a 1.8 percent tax increase -- which would mean $2 million in new revenue -- would correct the discrepancy and lessen the burden on their reserves this year.
County and district attorneys discussed the matter last week in a conference call but did not reach any conclusion, county chief financial officer David Starkey said.