Financial planning sets district apart
School funding in our state is a convoluted and complicated process. In Clover, we have effectively and efficiently navigated the course and are praised by our independent auditor, Greene, Finney, & Horton, for our budgeting and fiscal management for a number of years.
We aim to be good stewards of the public’s money, and we believe our strong financial position reflects our efforts.
There are three primary funding sources for education: local, state, and federal. On average, South Carolina districts receive 39 percent of funding from local, 54 percent from state, and 7 percent from federal sources.
The state portion consists of dollars allocated by the Education Finance Act, passed in 1977, the Education Improvement Act of 1984 and other smaller pieces of legislation that funnel dollars to local districts to fund school operations.
Capital projects are paid through funds generated through bond referenda or general obligation bonds. As you know, voters approved a $67 million referendum in March that will enable the district to construct $99 million worth of new facilities and update several others that will ensure we continue to provide a world-class education to our nearly 7,100 students. Our strong financial position did not go unrecognized by the nation’s credit rating agencies during the recent sale of bonds. Moody’s and Standard and Poors rated the district very well which will lead to greater interest savings over the life of the bonds
It has been common practice for the Clover School District to moderately increase the tax levy on businesses and other property such as vehicles and investment properties, which pay operating and debt service taxes.
The levy to homeowners only adds revenue to the debt service, which is a result of property tax legislation known as Act 388. We do this because it provides the operating revenue to handle the growth of our district.
Our approach to planning and budgeting for the future sets us apart from many districts in S.C. State law (Act 388) caps the millage rate that can be approved by local governing bodies.
In our case, the elected school board opts to raise the tax floor each year on businesses with the intent to move excess operational funds into capital projects at the end of year. This practice is not unlike many of you; you budget family expenses and transfer additional funds to savings or investment vehicles for future use.
This approach has helped to establish our district as one of the most fiscally sound in the state. For instance, a nearby district recently built a new middle school (capital budget) and was not able to open the school for an entire year because it was unable to staff (operational budget) it. Fast growing areas, like Clover, have great difficulty keeping pace with growth.
The efforts of your school board of trustees, school district administrators and the community support should be celebrated. Let’s take pride in the fact that we are recognized as a leader in S.C.