Fort Mill schools face $1M shortfall due to state error. That helps some taxpayers

Last-minute state budget errors sent Fort Mill schools scrambling over the past two weeks to find more than $1 million in additional revenue.

But the solution to find the money could bring some tax relief for homeowners.

The school district already proposed a tax rate increase that largely impacts businesses and property other than homes. The $272 million budget for the fiscal year starting this summer, which the district can finalize after a public hearing Tuesday, is an increase of nearly $18 million from the current year.

The school board met May 19, the same day the state Education Department released statewide budget projections that included allocation amounts for school districts. Two days later, the Education Department notified districts there were errors in its projections.

The changes involve new school enrollment data for charter schools, a transfer of per student funding from one charter district to another and statewide issues related to financial risk.

“All of this resulted in a loss to us of $1,041,723,” Associate Superintendent and Finance Director Leanne Lordo said at a special called Monday meeting.

Fort Mill went from needing an 8.5 mill increase to 10.5 mills. The district now recommends that change, but also a 2-mill reduction of debt service millage. For businesses and non-homes, the net result is the same 8.5-mill increase the district anticipated before the state change.

For homeowners, the change could lower taxes since debt service is charged on homes.

Fort Mill was able to absorb some of the funding loss due to properties in the district gaining value, meaning a mill is more valuable each year. For tax rates, each mill generates about $400,000.

All traditional school districts across South Carolina lost funds with the state change, Lordo said, except two small ones. One charter school district gained $52 million.

“That $52 million was taken, basically, from all of the what we call traditional districts,” she said.

Typical public school districts use enrollment data for one year to estimate funding need for the next. Charter schools are allowed to project school enrollment for funding. One charter district went up in its projection by the equivalent of 5,000 students, Lordo said.

Charter school students also are funded at a little more than $7,000 per student, she said, compared to $2,500-$4,000 per student for traditional public schools. Fort Mill gets about $3,800 per student from the state.

A public hearing for the Fort Mill school budget starts at 6 p.m. June 2 at the school district office, 2233 Deerfield Drive in Fort Mill. The school board will meet following that hearing to approve a budget.

Impact on other schools

The state error could impact public school districts across South Carolina.

“It didn’t just affect Fort Mill School District,” Lordo said. “It was statewide.”

Yet not all districts are impacted equally. Funding changes didn’t create problems for Rock Hill schools, district spokeswoman Laurabree Monday told The Herald.

Clover schools lost $402,684 due to the error, said district spokeswoman Stephanie Knott. The Clover school board will discuss that change Monday when it meets to adopt its budget for the coming fiscal year.