Fiscal Woes in CCSD Predicted in 2006

In 2006 as home values were rocketing upward, the South Carolina legislature made a stupid, stupid decision. People whose home values had risen dramatically over the last decade wanted their property taxes reduced because they couldn't afford to pay them.

Well, that's what they said. 

I'm no tax lawyer, but even I could figure out how to pay the taxes on my multi-million-dollar home beachfront on the Isle of Palms or fronting White Point Gardens.

If you think the tax burden for schools was shifted from property taxes to sales taxes to help the little guy, I have a bridge in Brooklyn to sell you.

Skip to twelve years later. Finances are going from bad to worse in the Charleston County School District. The average taxpayer doesn't understand that the fancy school buildings now dotting the county used sources of revenue not available for the district's operating costs of the district.

In other words, CCSD can continue to build gorgeous schools while being unable to fill them with well-paid teachers or to pay the electric bills. What caused this problem?

Guess.

Here's an explanation from the current CCSD Board:

Due to Act 388, our ability to increase our revenue is capped, preventing the district from being able to keep up with rising costs. Charleston sends $1 to the state and gets back 34 cents. When Act 388 was passed, the idea was to eliminate property taxes for homeowners and replace them with a 1 percent sales tax, but the money given back from the sales tax (34 cents on the dollar) was never enough to replace the money taken away with the elimination of property taxes for homeowners. School districts were to be allowed to make up lost revenue by increasing local taxes by a capped amount (consumer price index + increase in local population for the district). Our ability to raise local commercial property taxes is limited to 2.9 percent on average. However, commercial property taxes only make up 60 percent of our revenue. Because 40 percent of our budget comes from sources that we don’t control, we are only able to increase our total revenue by 1.7 percent annually (2.9 percent increase x 60 percent of revenue = 1.7 percent increase on total revenue).

It’s not hard to see that when costs grow by 4.6 percent, 5.6 percent, and then 6.3 percent and revenue grows by 1.7 percent, you’re going to lose every year.

For 2018-19, we are projecting a $498,000 deficit.

In 2019-20, we are projecting a $18.5 million deficit.

In 2020-21, we are projecting a $43.5 million deficit.

Of course, if we could get the educrat pigs out of the trough, finances would improve, but the chances of making up the deficit in that manner are slim.

It's time for our legislative delegation to face the music.

See postandcourier.com/opinion/commentary/looming-fiscal-threat-will-require-school-finance-reform/