It’s down to business time with Act 388. Fort Mill schools may have no other choice.

He isn’t going to stop talking about Act 388, but Patrick White believes maybe it’s time to get down to business.

The long-time Fort Mill school board member began a new push last fall to raise awareness of the impact state tax code has on high-growth school districts. New state legislators had been elected. There was reason for optimism. White gathered data to show how the Fort Mill School District, and by reason similar ones like Clover, aren’t getting nearly the funding levels they should due to Act 388.

That law began in 2006, replacing local property tax on owner-occupied homes with a one-cent sales tax increase on most retail purchases.

“I probably presented that (data), I’d say 50 times, both locally and in Columbia,” White said of the months since. “The reception that I get is everybody seems to understand the problem, but I get a feeling that there's not a lot of willingness to do anything to fix the problem.”

Yet high growth school districts, receiving less funding per the rate of new students, is only half the issue. While Act 388 took out property tax and thus school operations money for owner-occupied homes, it didn’t take away from businesses and rental properties. Those properties are taxed at a higher rate, and now bear the load of school operations funding.

White said if change is coming to Act 388, it may have to be the business community demanding it.

“I think they expect a school district to advocate for themselves,” White said of the tempered interest he received with lawmakers. “Our business community is really taking it on the chin. We've got businesses that our previous governor invited to the area, and now because of the way Act 388 works, that’s the only place that the operations tax comes from because homeowners don’t pay the tax.”

White looks at new, large area businesses like those at Kingsley in Fort Mill. Former Gov. Nikki Haley attended multiple groundbreakings, ribbon cuttings and similar events there as major employers LPL Financial and The Lash Group relocated to Fort Mill. The state and area municipalities have a host of tax incentives to lure business. So White believes a concerted effort by businesses calling for reform may carry more weight than a school district or two doing the same.

White met with one economic development council and wants to align other business interests against the setup that “unfairly shifted the cost” of school operations to companies and renters. He will continue with school and citizen groups where large numbers of voters gather. He already met with Molly Spearman, state superintendent of education.

“We knew it would be an uphill fight,” White said. “We know what the outcome's going to be if we don't change it.”

State Rep. Tommy Pope, also a candidate for U.S. House Dist. 5 after Mick Mulvaney left office to accept the budget chief job with the White House, chairs a bipartisan tax policy review committee. Pope said he understands the issues created by Act 388 since he serves the Lake Wylie area, also a hotbed for new residential growth. Pope said his group has looked at various tax reform scenarios, but any time taxes go up or revenue dips for one group, a plan loses votes.

Pope, after a recent community roundtable in Lake Wylie where one woman called the impact on landlords “criminal,” said work can be done to make a simpler, fairer tax system. A hard look at exemptions is an option. But, he said, an outright repeal of Act 388 isn’t happening.

“Politically, you will never be able to put that school tax back on homes,” Pope said.

Part of what White hoped to accomplish starting last fall was a conversation on change without repealing Act 388.

White has data showing flattened revenue despite a surge in student population, increasing classroom sizes and higher student-teacher ratios. He has five scenarios he says each would raise about $3.5 million for high-growth districts – the only ones facing the type of funding gap Fort Mill is.

They include increasing the 1-cent sales tax for higher reimbursements, increasing state base student costs for high-growth districts, adding a factor onto high-growth district funding calculations similar to what the state does for high poverty or minority areas, allowing a half percent tax on owner-occupied homes in high-growth areas and allowing local referendums for operating costs.

This story was originally published February 27, 2017 at 12:49 PM with the headline "It’s down to business time with Act 388. Fort Mill schools may have no other choice.."