A small fix to the state funding formula for schools would provide a little extra money next year for Charleston, but legislators in other districts that would be negatively impacted have introduced a bill to stop the change.
South Carolina uses an antiquated formula that bases state aid to school districts on the value of taxable property in the district. It has historically benefited poor, rural regions to the detriment of high-value urban and coastal districts. In 2007, the state pulled the taxes for schools off of owner occupied homes. Now, the Department of Revenue is poised to remove those property values from the equation.
Losing expensive homes that have inflated the tax values would be a small boon for Charleston — the district would get an additional $600,000 to $700,000 in state funding, according to district finance director Michael Bobby. Districts where owner-occupied homes account for a smaller percentage of the total taxable property — places like Horry County — would be left hurting from the change. Others, where the homes accounted for nearly half of their taxable property, will see a surge in state aid. Due to Charleston’s even distribution among various types of property (owner, rental, commercial, industrial), we’re near the middle, Bobby says.
“There’s about as many losers as winners,” he says.
While he can understand the gripe from counties like Horry, Bobby says that Charleston has to consider the bottom line until there’s a long term fix.
“In the short term, we’d seek to generate any additional revenue we can,” he says.
The proposed legislation, which received a subcommittee hearing earlier this week, would keep owner-occupied home values in the formula, artificially inflating values in Charleston and elsewhere, until the entire formula is changed. But real change isn’t likely to happen until the state can find more money, so no district walks away from the table with less money. In these tough budget times, it’s just not going to happen.