Commercial property owners in Charleston County could face a hefty tax hike if school officials move forward with a proposal to raise the tax rate to help cover a multimillion funding gap for next school year’s budget.
Acting Superintendent Michael Bobby during a school board workshop Thursday laid out a plan to raise the property tax rate to generate $22.4 million for school operations to help pay for a proposed 2015-16 school year budget of $430 million. The proposed budget has risen from an earlier estimate of $419.5 million due to the addition of around $12 million in initiatives such as a 2 percent raise for all school district employees that comes in at $6 million and $1.8 million for reading and math programs.
Bobby said the $22.4 million raised by the tax rate increase would cover a state mandated pay increase for teachers, a proposal to add more buses to start six middle schools earlier and the cost associated with a projected enrollment increase of 1,500 new students.
Any potential tax-rate increase will cost nothing to owner-occupied homes, which are exempt from paying school-operating taxes. The proposed tax hike would impact taxes for vehicles and commercial properties, which include businesses, apartments and rental homes. A tax-rate increase to raise $22.4 million for the school district would add $120 to the tax bill of a $200,000 rental home.
The school district hasn’t increased the property tax rate for school operations since 2009. Because of a healthy increase in property taxes and new revenue from Boeing, the district was able to grow its budget last year by $22 million without raising taxes.
This year the district is anticipating a flat or slight decrease in its property taxes and no additional boosts in revenue from Boeing, while its budget is proposed to rise $26 million from $404 million this school year. Bobby said the district is working with the county assessor and auditor to figure out why the district’s operating tax base isn’t growing, saying that he’s even considering bringing in a third party to evaluate revenue projections.
“It’s hard to make sense of,” Bobby said.
School board members didn’t weigh in on the proposed tax-rate increase at the workshop. Instead, the group focused on where it wants to cut expenses. The district offered a new list of more than $5 million in potential cuts, including delaying the opening of a magnet school at the old C.C. Blaney Elementary School in Hollywood and a new middle school on the Burke High School campus in downtown Charleston.
Bobby said he anticipates being able to generate more savings through departmental and central office cuts. And the district could save about $2.5 million if it waited until January to implement the earlier school day at the six middle schools.
School board members Chris Staubes and Chris Collins said they were uncomfortable with a $655,420 cut that would increase first-grade class sizes by one student. Collins described that cut as the “last straw” and Staubes said he worried that it could be a “slippery slope” to increasing class sizes every year, which he worried could hurt student performance.
School Board members Todd Garrett and Chairwoman Cindy Bohn Coats wondered if the district should re-evaluate the funding of its elementary and middle school literacy programs, with Coats saying there’s been a “wholesale lack of improvement in reading.”
Garrett and Coats also asked the district to go back through its base budget and each school’s individual budget to see where programs or services that aren’t effective could be slashed.
“Because everything has to be on the table,” Coats said.
The budget will make its way through several school board committees over the next few weeks. The full board will formally review the spending plan for first reading on May 11.