It’s time to review state’s education funding

Green apple on stack of red books.
Green apple on stack of red books. Stock

Could it be possible that the General Assembly could take a new look at the state’s education funding as a whole and Act 388, in particular? State Sen. Wes Climer, R-Rock Hill, has hope.

Climer, whose 15th District covers much of eastern York County, was instrumental in working with fellow lawmakers to budget $5 million for high-growth school districts that lose out because of the state’s funding formula. The Fort Mill and Rock Hill school districts will be among the biggest beneficiaries statewide, with Rock Hill getting $160,000 and Fort Mill getting $120,000 extra for operating expenses.

Climer described the fix as a way to compensate for a funding mechanism that penalizes high-growth districts. He notes that districts are graded by the state on an “index of taxpaying ability,” which is supposed to assess how much districts can rely on their own tax base to pay for education costs.

That measurement then is used to determine how much money the state gives each district. The problem is that state law also severely limits districts’ ability to benefit from the wealth of the local tax base, especially in fast-growing districts such as Fort Mill and Rock Hill.

Act 388, the so-called property tax reform passed in 2006, replacing local property taxes on owner-occupied homes with an additional one-cent sales tax increase on most retail purchases. Unfortunately, receipts from the sales tax have fallen far short of making up for the loss of revenue from local property taxes.

Act 388 also excluded businesses and rental property from tax protection under the law, which shifted much of the burden to them for education funding. And as untaxable residential development increases, adding more children to the school rolls, districts are harder pressed to pay for additional operating costs.

Officials in the Fort Mill school district, for example, estimate they would need more than $1 million more next year to make up the difference in what the district would have received if Act 388 had never passed.

In addition to funding supplemental money for fast-growing districts, Climer also supported a $75 increase in the per-student cost allotment from the state. He concedes that these are just temporary solutions, but even they were hard work.

“We fought on the Senate floor for over three hours to get this,” he said of the $5 million in extra funding.

Nonetheless, he hopes this is a step toward addressing the problems posed by Act 388.

Another possible sign was an announcement this month by S.C. Rep. Brian White of Anderson County, who is chairman of the House Ways and Means Committee, regarding the formation of a panel to study education funding. The primary focus of the group will be to consider approaches to solving the problems of chronically underfunded districts targeted by the S.C. Supreme Court.

But while White didn’t specifically mention Act 388 or the problems of fast-growing districts, he did take issue with the state’s “piecemeal approach to education policy and funding.”

He is right. Until lawmakers are willing to look at education funding as a whole and address the fundamental problems caused by Act 388, the state will never be able to come to grips with these serious issues. We realize it will be difficult to undo tax relief that has been on the books for more than a decade, but that’s why a review of the entire funding formula and wholesale reforms are needed.

Here’s hoping that Climer is right and lawmakers are willing to take on that challenge – if not next year, then soon.