Fort Mill Times

Act 388 overhaul? Fort Mill school leaders have a few ideas.

White, left, and Pope.
White, left, and Pope.

State funding for public schools isn’t a new concern in Fort Mill. But there is, perhaps, a new hope.

Patrick White, chairman of the Fort Mill school board, took time at a recent board meeting to lay out numbers on the funding gap he says already hurts Fort Mill schools and could worsen them should it continue. He’s taken the same time for state legislators, candidates for those offices, school improvement councils.

For pretty much any group he can get together in a room, he’ll make the time to present the numbers.

“After 14 years, I feel like the clock is ticking on me to do something about it,” White said.

White isn’t up for election this year and doesn’t have plans yet for when his board term comes due in 2018. He’d rather focus on what is a critical and in some ways unique to Fort Mill issue.

“It’s basically the same thing that we’ve seen for years,” White said. “If you continue to get no change in the funding formula and the number of new students is growing at a higher pace than the state is funding you, that’s obviously going to be a problem.”

Yet White sees an opportunity to push.

Several new state legislators will head to Columbia in January. Some returning legislators from the area already are looking into tax reforms that could impact school funding. White sees a bit of a political landscape “reset” in Columbia.

“It just seems like there’s more willingness for people to talk about it,” White said.

State Rep. Tommy Pope, Dist. 47, represents parts of York County. Pope, a Republican, is chairing a bipartisan tax policy review committee meeting every other week or so. They’ve heard from groups from the state Department of Revenue to citizens and school districts. They are exploring income, sales and property tax, along with overall education funding and business licenses.

"We started looking at dividing the issues into groups," Pope said. "It's a web. If you pull one piece, it moves another somewhere else."

Pope’s committee doesn’t have a hard deadline for its work, but could propose legislation or recommendations by the coming legislative session. Still, there is a reason reform doesn’t happen quickly, or easily.

“Regardless of what they choose,” White said, “it’s all going to take money.”

State funding: Impact on Fort Mill

In 2006, Act 388 became law after a movement in the state toward property tax relief. Local property tax on owner-occupied homes would be removed, offset by a one-cent sales tax increase. The state would use the extra sales tax revenue to provide school districts equal payments, replacing what they’d lose from property tax revenue.

Reimbursements would grow annually based on population increases, officials reasoned.

What legislators likely didn’t foresee was the housing market and overall economic plunge that would hit the state the same year Act 388 arrived. The full reimbursement rate the state expected for school districts was met just one year since.

Now the housing market has more than come back in Fort Mill. It’s reaching new highs annually, making Fort Mill the fastest growing school district in the state. Funding still operates as it has since 2008. It can’t account for some districts losing students and getting the same amount as high-growth areas tasked with serving many more students.

"We've been talking about it for several years,” said Chuck Epps, superintendent of the Fort Mill district. “We're in the minority as far as number of districts that are fast-growing. The amount of revenues we receive from the state cannot keep up with the rate of growth of new kids."

A $400,000 new home in the Fort Mill district, now the average average assessed value, loses almost $2,800 in the current funding mechanism compared to what it would generate pre-Act 388. The district lost $12.7 million in operating revenue last year compared to the previous tax setup, nearly double the amount from just three years prior.

In eight years, the district lost $60 million due to the change. More than 6,000 new homes have been constructed in the district with thousands more in the pipeline.

“We’ve already reduced about everything that we can,” White said about the district’s budget.

Extra programs like foreign languages in elementary schools were cut. Middle school sports funding was for a time, relying on community fundraising. Classroom sizes have increased steadily since 2011, and there are more than two full students per teacher now than in 2008.

The board raises its millage rate regularly, but a mill increase only equates to about 1 percent of the overall budget. And, without homes paying for operations, the burden falls on businesses and rental properties.

“It’s not just a school issue,” White said.

That business impact could be an ally for school officials. The state recognizes what is happening to businesses, and a fix there is a main goal for the tax reform committee meeting now.

"We're looking at how to provide some relief for the small businesses," Pope said.

With at least 12,000 more homes projected in the next half dozen years, that tax issue could become more exaggerated. The district would expect to lose more than $33 million in revenue from those new homes, compared to the funding formula before Act 388.

"There's going to be a period in the future, and we don’t know how far in the future yet, where it'll be real challenging on the operational side for us," Epps said.

A new approach

Early into Act 388, high growth school districts including Fort Mill saw potential issues. So did businesses, realizing they would be on the hook for school operations taxation while homeowners wouldn’t. There were repeated calls for repealing Act 388.

White isn’t looking to repeal the legislation now. In all his conversations with legislators, a common retort was the question of what should replace it. What, they asked, is the better solution?

“We’ve always complained about the problem,” White said. “We wanted to give some suggestions.”

White put together five possible solutions aimed at generating about $3.5 million each. Any one of them would mean, in Fort Mill, a way to hold the line on the tax businesses pay and enough money for about 35 new teachers.

“None of those says anything about repealing Act 388,” White said.

One simply increases the one-cent sales tax reimbursement for high growth districts. Another increases base student cose for high growth districts. High growth districts could have a factor added onto their student funding calculations similar to what high poverty or minority areas have. The state could let high growth districts assess a .5 percent tax on owner-occupied homes, or hold a local referendum for operating costs.

The taxing options still wouldn’t cost homeowners as much as their property taxes did prior to Act 388. White feels like the proposals make sence in fixing a specific problem. Fort Mill isn’t the same as districts statewide, which is why so many calls for a complete overhaul of the system went unanswered.

How different are we?

“When you’re really kind of the only district out of 82, it’s different,” White said.

Fort Mill ranks 18th among districts in total student count, about 3,000 students above the state average. Fort Mill has almost twice the four-year growth rate of any other district statewide at 4.9 percent, well above the state average at 1.2 percent. Fort Mill spends the sixth lowest operational amount per pupil in the state, almost $1,600 below the state average. Yet the district is second highest in the state for percentage of funds spent in the classroom. Fort Mill leads the state in capital spending per student, at more than three times the state average.

All those numbers indicate to White that Fort Mill isn’t a typical South Carolina school district, which is why the handful of suggestions he has are better for the few districts facing growth challenges than a wide-ranging tax overhaul.

“Those are small things they could do to fix the high growth areas,” he said.

White is hopeful a new wave of legislators and willingness to dig deep with Act 388 will be enough to enact change. As a public official, he also understands who has ultimate authority with laws and revisions. White feels like if enough parents in his district — many having moved and invested here for the schools — understand the funding issue, they will help ensure legislators know what needs to be done.

Which is why he will meet whenever, wherever, with whatever time he has left on the school board, to get the word out about the number crunch that’s already here, and where it could take the district.

“It’s also presenting that information to our parents,” White said.

With high growth school districts in his county like Fort Mill and Clover, and even in communities spanning down I-77, Pope said he understands growth pressures and how they can relate to schools.

"We've got some unique challenges here,” he said. “We've got the growth, but we don't always get the benefit from it."

The challenge is to fund all schools in the state in the fairest way possible, which Pope believes his group can help solve.

"We want to raise the bar for the state, but we don't want to pull our schools down that are excelling," he said.

Epps said it’s tricky advocating for changes crucial in areas like Fort Mill, when so many others don’t face the same challenges. But it’s something leaders here simply have to do.

"We're not trying to be just concerned about our own situation,” Epps said. “Statewide, districts aren't having the same issues we are."