The Charleston County School District has not decided whether to participate in a deal that would shift millions in school revenues to North Charleston redevelopment efforts, and is negotiating for a better offer.
The city has offered to let the school district keep 10 percent of the property tax revenue it would receive from the growth in property values in the redevelopment area, if the school board agrees to the deal.
North Charleston wants to use the rest of the money to develop and attract new homes and businesses to the city.
District officials have countered by asking for 15 percent, and have asked if city development plans would fund walking and biking trails, or incentives for teachers.
“We’re going to continue those negotiations, hopefully with a meeting with North Charleston later this week,” said school board Vice Chairman Tom Ducker, following a committee meeting Tuesday, which was mostly conducted behind closed doors.
North Charleston plans to expand the size of an existing tax increment financing district, to cover nearly 700 acres of the city, and extend the life of that tax district by a decade, to 2028.
In such a district, known as a TIF, property tax revenues generated by new development or increases in assessed property values are used to fund public spending in that area.
For example, if someone builds a new office building, that would normally mean new property tax revenue for the city, county and school district. In a TIF district, the new revenue is instead used to pay off bonds issued to finance things like sidewalks and street improvements in the same area, which in theory helped attract new development such as that office building.
School District Chief Financial Officer Mike Bobby said that with every TIF district — and there are many in Charleston County — the school district faces the same question: Would tax-generating development happen without the TIF district funding? In each case, it’s future, potential revenue that the district is being asked to forgo.
Board members Ducker, Craig Ascue and Elizabeth Moffly made up the committee that met Tuesday to discuss North Charleston’s request. However, Moffly left the room after Ducker and Ascue voted to have the meeting in a closed-door “executive session.”
Moffly said the discussion should be public. The Post and Courier also objected to the executive session, on the grounds that the state’s open meeting regulations don’t allow for a closed-door discussion about the division of tax revenues.
Ducker said a contract is being negotiated, and therefore a closed-door meeting is allowed.
Later, Ducker took questions about the TIF, and said the district has asked North Charleston about the possibility of using some TIF funds for incentives for teachers in North Charleston.
In North Charleston’s existing TIF district, the only project for which bonds have been issued is Oak Terrace Preserve, a subdivision the city is building near Academic Magnet High School in the Park Circle Area. The current TIF has not produced enough revenue to cover the debt payments on those bonds, and the city has been making up the difference, about $200,000 yearly, by selling building lots in Oak Terrace Preserve.
If the school district agrees to participate in expanding and extending that TIF district, it would forgo most new tax revenue within those 693 acres until 2028, with the hope that the TIF district would grow the tax base over the longer term.
If the school district declines to participate, it would collect all the tax money it would normally be due from properties in the existing TIF area, starting in 2018, and any new revenue generated in the expanded TIF area immediately.
Charleston County has already agreed to participate in the proposed extension.
Property owners in the TIF area pay the same tax in either case, it’s just a question of where the money goes.
The school board is expected to vote on the issue Monday.
Reach David Slade at 937-5552