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Bill gives school districts new option

April 6, 2014 

  • In summary

    Bill isn’t perfect but it would give school districts more options to pay for local construction projects.

A bill that would give more school districts the option of collecting a 1-cent sales tax for construction projects would offer some needed flexibility to the districts.

The proposed bill, sponsored by state Sen. Harvey Peeler, R-Cherokee, would allow school boards to ask voters to approve a 1-cent tax increase to pay for new education buildings. Under current law, the county where a school district operates must raise $7 million or more in accommodations taxes, imposed on vacation and other temporary rental properties, before it can ask voters to approve the sales tax for education.

As of now, only two counties – Horry and Charleston – have used that option to collect the 1-cent tax. The tax can be imposed for no more than 15 years before voters must be asked to reauthorize it.

Peeler said his goal was to extend the option of raising the local sales tax for educational purposes to the state’s smaller counties. Proponents of the bill also argue that using sales taxes instead of property tax increases to pay for school improvements would ensure that more residents – and some visitors – are paying for the improvements.

But that also presents some drawbacks. The state already is too reliant on sales taxes to pay for educational needs.

In 2006, lawmakers passed Act 388, which swapped a portion of school property taxes for a 1-cent state sales tax, completely redistributing funding for education. The deal helped homeowners with rapidly rising property taxes – including tax bills on second homes – but many poorer school districts saw little, if any, benefit.

Sales taxes also are regressive. They hit lower-income residents, who must devote a higher percentage of their income to sales taxes for basic necessities, harder than they do wealthier taxpayers.

Nonetheless, under Peeler’s proposal, the additional 1-cent local sales tax would be entirely optional. School districts would have to assess their building plans and decide whether the sales tax would be a viable option for funding them.

And voters would have to approve the tax before it could be levied.

We would prefer a comprehensive review and overhaul of the way operations and school construction are paid for in the state instead of piecemeal changes like this one. But Peeler’s bill at least establishes a uniform standard for school districts in all the state’s 46 counties and provides another option to raise the money for construction projects.

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