Rock Hill schools move $1M to cover revenue loss after manufacturer’s tax appeal

The Rock Hill school district has to pay back more than $1.2 million in property tax revenue.

The former Bowater plant, which now is owned by Resolute Forest Products, recently filed an appeal with the S.C. Department of Revenue over its assessed property value for tax years 2015, 2016 and 2017, said Terri Smith, chief finance officer for the school district. A portion of Bowater’s property tax paid to York County supports schools.

The appeal has resulted in a loss of $1.2 million in tax revenue to the school district this year, and a loss of $530,000 in revenue annually, Smith said.

As a result, the Rock Hill school board approved Monday the administration’s request to move $1.2 million from the district’s fund balance to cover the loss.

That would leave the district with 20 percent of its funds remaining in its rainy day account. Under district policy, the district must have at least 17 percent of its funds in the fund balance, Smith said.

In June, the school board approved a $151.2 million budget for the 2017-’18 school year.

The Catawba area plant employs close to 500 workers and produces specialty paper and market pulp, according to the company’s website.

The manufacturer claimed the tax assessments were excessive due to economic challenges facing the paper industry, said Bonnie Swingle, spokesperson with the S.C. Department of Revenue. A settlement reduced Resolute’s taxable real property.

Resolute Forest Products has been discussing the Catawba plant’s fair market value with the state since 2015, spokeswoman Debbie Johnston wrote in an E-mail to The Herald.

“Considering the fact that discussions with the state began in 2015, we hope that all recipients of tax revenue were made aware of the pending settlement and had ample time to prepare and adjust for a change in receipts,” Johnston wrote.

The plant’s market value affects the amount Resolute has had to pay in property tax for 2015, 2016 and 2017.

“The state and the company worked closely together to determine the fair market value of the property, considering the decline in demand for paper grades manufactured at the mill, reflected in the closure of two paper machines, one in 2012 and another in 2017,” Johnston wrote.

With a shift to electronic communications, Resolute has experienced lower demand for various types of coated paper products, such as catalogs, flyer inserts and magazines, Johnston told the Charlotte Observer in June. The company suspended use of one of its paper machines on June 30 and laid off 180 people.

When the Rock Hill school district plans its 2018-19 budget, it will have to factor in the $530,000 loss in revenue, Superintendent Kelly Pew said.

This story was originally published December 1, 2017 at 9:31 AM with the headline "Rock Hill schools move $1M to cover revenue loss after manufacturer’s tax appeal."