By Paul Gable
The Charleston County School District thinks it has found a way to close the continuing $18 million projected shortfall in its budget.
School District Superintendent Gerrita Postlewait told local media money in the capital fund could be moved to the general operating fund to help solve the shortfall with no impact on taxpayers.
According to a board member with knowledge of the plan, capital fund millage would be reduced with a corresponding increase in operating fund millage.
The idea is the overall plan to shift millage would be revenue neutral, thereby prompting the claim that taxpayers would not be affected.
However, this solution appears to fly in the face of Act 388 of 2006, which limited school budget operation fund taxation.
Act 388 specifically exempts owner occupied residences, what is known as 4% property, from taxation by school districts for operating funds. Only rental or second homes (6% property) and businesses (10%) property may be taxed for school operating funds.
The state raised the sales tax by one cent, which is designated to be turned over to school districts, according to a complex formula, to make up for the loss of 4% property tax revenue from operations millage.
However, when it comes to the capital fund millage, all three classes of property are taxed.
In addition, Act 388 sets limits on the amount operations fund millage can be raised in any one year with another complex formula involved.
Therefore, it’s not just a simple reduction of millage for one fund with a corresponding increase in millage for another fund that can be made.
Details of the plan are supposed to be presented to the full Charleston County School Board at its September 22nd meeting.
This is going to be a case of the devil is in the details.
The Charleston County School District was the subject of legislation passed by the SC General Assembly last session known as the Charleston County Schools Balanced Budget Act.
The act requires independent certification of tax revenues and a mid-year review of revenues in an attempt to eliminate what have become continuing budget shortfalls for the district.
Maintaining a balanced budget has been a continuing problem for the Charleston County School District and it doesn’t appear it will become any less complex with this supposed fix.