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Dorchester County taxes businesses $1.8M extra to pay for schools
By Scott Miller
Staff Writer
Oakbrook Elementary School in Ladson has 28 classroom trailers that school district officials affectionately call “learning cottages.”
They’re temporary classrooms needed because buildings are overcrowded. Many schools in Dorchester School District 2 have them. And more are needed, despite the opening of a new high school this fall.
Businesses will foot the bill for the trailers and the new school.
Dorchester County Council just approved a $1.8 million property tax increase that will mean
the owner of a commercial property valued at $250,000 will be paying an additional $223 a year.
Now, Charleston County School District is considering a $5 million property tax increase on businesses.
An owner of commercial property valued at $1 million would pay an extra $204 annually, school district CFO Michael Bobby said.
That burden stems from a property tax relief measure that state lawmakers approved in 2006 when the Palmetto State changed the way it funds schools. Property tax revenue from owner-occupied homes was swapped with a 1% sales tax increase.
When seeking funding locally, districts now must rely on businesses because owner-occupied property is no longer on the tax rolls for schools.
The Berkeley County School District is the only school system in the tri-county region not asking for a tax increase, despite facing a $3 million budget deficit.
“Our board is more than likely not going to allow us to raise the millage on anybody,” district CFO Brantley Thomas said.
“We’re growing in the residential market, but we don’t have access to the tax base anymore. We could have balanced our budget just on the new owner-
occupied assessments. Right now, the legislators have given really no option to do anything.”
Relief and grief
The relief actually took effect in 2007, but the aftereffects are only now becoming apparent as districts begin seeking funds this year.
“Unfortunately, the only place the school district has to go is the business community,” said Sean Bennett, a business owner and vice chairman of public policy for the Greater Dorchester Summerville County Chamber of Commerce.
“We want to support the school district, but at the same time we don’t want to bear the brunt of funding needs. This budget increase certainly brought it to a head.”
The Legislature intended in this year’s session to look at the property tax relief act and address any issues that emerged after the reform was implemented, but the matter got lost in a larger debate on illegal immigration.
Few options left
Charleston has no choice but seek a tax increase, Bobby said.
“There have been a number of (budget) reductions that have already taken place just to get to where we are,” he said.
“We have reduced the cost-of-living adjustments for all nonteaching staff to 1.9% (from 3.15%). We’ve increased class sizes in kindergarten and first grade. We reduced support department budgets by 15%. We made a large number of reductions in cost controls.”
The Charleston school district’s current proposal includes a 1.7%, or $5.3 million, budget increase that would use $7.1 million in surplus funds to mitigate an expected loss of $9.7 million in state funding.
The school board split 4-4 on the budget, sending district staff back to make a few changes. Getting rid of the tax increase on businesses will not be among those changes, Bobby said.
Dorchester County, meanwhile, intends to increase spending much more, raising eyebrows in the business community and in one member of Dorchester County Council.
The council voted this month to tax businesses an additional $1.8 million, $1 million less than the district requested, in part to help purchase temporary classrooms at overcrowded schools.
Overcrowding has become such a problem that the county also extended a moratorium on residential development four more months as it works on ways to manage growth in the county. It was set to expire this month.
The tax increase, meanwhile, helps fuel a nearly 11.7% budget increase.
Before the tax increase, the county was set to increase the district’s budget 8.5%, from $56.4 million last year to $61.2 million, said Councilman Jamie Feltner, who voted against the tax increase along with Councilman Richard Rosebrock.
“It was a pretty substantial increase (in the school district’s budget) without having to tax the businesses that we’re trying to bring to Dorchester County,” Feltner said. “You show me any business, especially with this economy, that can increase their budget by that amount. Everyone’s feeling the heat of the downturn of the economy.”
Growth rate
Businesses in Dorchester County took a hit last year because the school district came to the council and asked for more money, Feltner said.
Dorchester District 2 needs $1 million to staff the new high school and an additional $500,000 to buy 16 more “learning cottages,” Superintendent Joe Pye said. The remaining $300,000 will fund programs to improve the district’s dropout rate.
Double-digit budget increases are not uncommon, because the district is constantly playing catch-up with revenue and expenses. Classroom sizes are growing. Fuel costs are soaring.
The state has mandated an increase in teacher salaries. Student population is growing. Programs such as foreign language for grade-schoolers have been cut, Pye said.
After mobile classrooms are in place, the district’s next option will be to increase class sizes to 35 students because the schools are out of room, he said.
“We’re growing at an enormous rate. This new high school added a lot of expense,” Pye said. “Our growth is a problem for us. One of our schools has 28 mobiles on it. It’s mobile city.”
Scott Miller is a staff writer for the Business Journal. E-mail him at smiller@scbiznews.com.
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