Fort Mill, Rock Hill schools are getting a cash boost. Could a funding fix follow?

More money is all but finalized for high-growth school districts like, and including, the one in Fort Mill.

“We did put some money in the budget for fast growth school districts,” said state Sen. Wes Climer (R-Dist. 15), who along with Sen. Mike Fanning (D-Dist. 17) from Great Falls and Sen. Sean Bennett (R-Dist. 38) from Summerville pushed the issue from their side of the legislature.

“There's a couple things in the budget that should be helpful for all the school districts in York County, but particularly for Rock Hill and Fort Mill,” Climer said.

Legislators compromised to increase the state base student cost by $75 — the Senate proposed $85, the House $50 — meaning more total money for districts with more students. The state also approved $5 million in new money for high-growth districts.

“This is the district's money,” Climer said. “It's part of their operating money. This obviously does not solve the problem. But what it does, is it lays down a marker and sets the precedent that the state of South Carolina acknowledges that there is a problem.”

A final vote on the combined budget comes Tuesday. A new fiscal year begins July 1. Local lawmakers said at this point it would take a veto from Gov. Henry McMaster to cut the extra funding and Climer considers that highly unlikely.

More than a decade ago, South Carolina passed Act 388 which removed taxes for school operations from homeowners’ primary property. A levy on businesses and rental property remained as a source of income for public schools. So areas with high commercial or rental tax bases still could generate revenue, but areas where residential growth flourished couldn’t.

The Fort Mill School District, as well as others in the area, have been pushing for — even if they’re not optimistic toward — change. The district, which seen new residential development bring hundreds of new students into its schools each year, would need more than $1 million in the coming year to bring operations funding to where it would be in a pre-Act 388 world.

The issue, Climer said, is the state created an “index of taxpaying ability” gauging how much districts are relying on their own tax base before coming to the state, then added Act 388 on top of it, nixing the residential tax.

“Fort Mill is substantially penalized because, on paper according to the index of taxpaying ability, it ought to be raising a lot more money than it does. But it can't raise that money. It's really bad policy.”

Of the $5 million, Fort Mill will get about $120,000. Rock Hill will get about $160,000. Not enough to make up the projected gap in Fort Mill, but perhaps a “stepping stone to a more permanent solution.” Climer said.

Fort Mill and Rock Hill rank among the biggest beneficiaries statewide.

“It's a pretty big achievement,” Climer said. “And here's why: The state is acknowledging through its budget that there is a problem. In the budget, in law, the state recognizes that the funding mechanism is messed up and it's punitive to high-growth districts.”

The money comes from a $43 million sale of air bandwidth by SCETV, the state educational television network. The station sold space to make capital improvements. The $5 million doesn’t come from the station’s operating money.

“It comes from the sale of a public asset,” Climer said.

It took three hours of debate on the Senate floor and six amendments to get the new funding. Climer didn’t get everything he wanted. He and colleagues asked for an Act 388 review committee, which the Senate approved but House didn’t. But there was support from local House members for the approved money, including state Rep. Gary Simrill (R-Dist. 46) from Rock Hill.

“It’s not solving the problem in Fort Mill,” Climer said. “We've still got a lot of work to do. But this was a good session for Fort Mill.”

Patrick White, a Fort Mill school board member who spent recent months making public pitches for change to the Act 388 setup, said Fort Mill school officials are pleased with any extra money it receives. Yet the bigger win could have been the Act 388 review that didn’t pass.

“We were really disappointed in that one,” he said.

The $5 million is a one-time deal, and it will be spread over about 40 districts. That’s five or more times the number White identified as high-growth, but it’s also how many it took to get required support for the funding. White hopes it’s just the start.

“We're hoping what they've done is they've opened Pandora's Box, that if they recognize there is a problem then they realize we'll come back next year and advocate for what we believe is fair,” White said. “We’ve said all along we didn’t believe this is something we’d fix in one year.”

White credited the rookie senator for working to get as much as he did, at an important time when continued growth looms in Fort Mill.

“He quickly understood the problem not just as it is today, but in what's coming,” White said of Climer.

Just in time

The news comes at a good time for the Fort Mill district.

“Final adoption of our budget will be at (the June 6) board meeting,” said Leanne Lordo, district assistant superintendent for finance operations.

As of May, plans were for a $116.8 million budget. An increase of more than 9 percent from the current year. The base student cost would increase by $85. More than 88 percent of the budget would go to salaries and benefits. Operations and maintenance of facilities would take up more than 6 percent.

New items in the proposed budget include:

▪  Opening of Pleasant Knoll Middle School

▪ 40 new classroom teachers

▪ Six new special education teachers or assistants

▪ Three full-time school psychologists

▪ An assistant principal at Nation Ford High School.

The local millage rate would increase 9.8 mills, while the debt millage would drop one mill. Total local, debt and countywide millage would be 329.2 mills.

Lancaster still crunching numbers

Lancaster County worked off a $97.2 million budget in the current fiscal year. That figure was up almost 6 percent from the prior year. More than 85 percent of district revenue goes to salary and benefits. A budget for the coming fiscal year should be approved June 28.

“It will likely change by June 28,” district public information officer David Knight said.

As of mid-May, the district was looking at a $102.6 million budget for the coming year. An increase of almost 6 percent. Plans are to keep operating and debt service millage the same, meaning no increase in the tax rate.

The new budget projects an additional $85 per student in base student cost from the state, and 250 more total students than the district had this past school year. Salary and benefits make up more than 86 percent of district costs.

“Again, those numbers will change some as information comes in from the state and county giving us better revenue estimates and as we get better estimates on how much we need to budget for expenditures,” Knight said.

Expected costs with the coming budget are expected to exceed revenue by about $2.8 million, meaning the district would have to tap into reserve funds.

Last year, the district passed a budget with an estimated $3.6 million gap between anticipated revenue and spending, though budget changes were made throughout the year. There wasn’t a change on operating millage, but the tax rate on debt service increased 15 mills with the passage of a $199 million bond package to include a new high school and elementary school in fast-growing Indian Land.

This story was originally published June 2, 2017 at 5:34 PM with the headline "Fort Mill, Rock Hill schools are getting a cash boost. Could a funding fix follow?."