School Bond Millage at 54

In 2005 the citizens of Pickens County voted down a $197 million bond referendum to renovate and build new schools. The people sent a clear signal they wanted the schools to be renovated and built a little at a time. Instead of listening to the voters, the next year the school board went around the state constitution and passed the Greenville Plan, borrowing nearly $400 million just by raising their right hands in a 6 to 2 vote.

I was on the school board at the time and voted “No”, and exposed the “Greenville Plan” for the fraud it was. See the Greenville News op-ed below where I explained the scheme in detail.

As a result, in 2007 the school bond millage rate sky-rocketed from 19 mills to 58 mills. Bond millage and the tax revenue it raises is used to build, renovate and maintain the buildings. (The operations millage of 110 mills is used to fund the schools day to day to pay for salaries, benefits, textbooks, gasoline for buses, lawn cutting, etc. is not the subject of this write-up.)

With each passing year as more houses were built to help fund that fixed annual bond payment, the more conservative school boards of 2010, 2012, and 2014 passed on those savings to the taxpayer and the tax rate fell from 58 to 52 mills.

When I was defeated in 2016, the administration with the unknowledgeable school board in tow stopped the natural slide in the millage rate, upped the borrowing to raise the rate to 54 mills and since has gone on a borrowing spree to keep the rate from falling as it should have in the face of all this growth.

The annual bond payment for the Greenville Plan is $22 million a year through 2032. In 2016 (my last year on the board) the school board also borrowed $3.5 million and pulled $1.7 million out of savings to pay for that year’s building improvements of $5.2 million. Hence, total borrowing was $22 million for the Greenville Plan payment and $3.5 for capital needs or a total of $25.5 million.

The value of a mill was about $485,000 back then. (The value of a mill is how much money the school district raises when it raises the tax rate 1 mill from let’s say 52 to 53 mills.)

Today so many more homes and businesses are paying taxes, so when the millage rate changes by a 1 mill, it raises $680,000. If the school board was still borrowing $25.5 million a year, divided by the much larger $680,000 value of a mill, the millage rate would be much lower at 37 mills (hence my statement above, “Today, that tax rates should be in the high 30’s”)

Instead of allowing the growth to push the millage rate lower and the savings to accrue naturally to taxpayers, the savings has been sucked up by the school district in toto, as the district/ board purposely borrows more and more each year to keep the rate locked or “stabilized” at 54 mills.

Today the school board still borrows $22 million to pay the SCAGO dummy corporation to pay the Greenville Plan bonds, AND it now borrows another $12.5 million a year for “capital spending”.

Annual details: the Greenville Plan payment has been, is and remains a constant $22 million, but the additional capital borrowing in 2016 was $3.5 million, $3.8 million in 2017, $5.0 million in 2018, $6.5 million in 2019, $10 million in 2020, $11 million in 2021 and $12.5 million in 2022. Last month the board approved borrowing $37.5 million in 2023 (or $22 million for the Greenville Plan and up to $15.5 million for capital. It is out of control folks. The policy is to borrow and spend as much as they can and don’t let the rate fall.

This approach of borrowing as much as the district can in order to keep the tax rate from falling has caused 5-year capital spending to balloon. When I was defeated in 2016, that 5-year plan was $33.4 million. It is $68.75 million today. That is a 13% growth rate per year.

By the way, I remember it like yesterday, the majority saying if Holly Springs and AR Lewis schools are closed (I voted “No” on that too), it will save money on capital spending. I knew it was a lie at the time and it proved to be, unless their idea of saving money was then growing capital spending an average of 13% a year.

In sum, as the county grows, the millage rate will never come down as the school district just borrows more and more and finds ways to spend that money on this or that capital project, keeping the millage rate from falling, stuck at 54 mills.

When you look at the principal and interest being spent on school buildings, it will be about $750 million over the life of the loan. It is just too much. The district's bond tax rate is 54. In comparison, the county government bond tax rate is 3.9 mills. Over 20 years the county government will spend $35 million on the jail loan. The school district spends that in just one year on their principal and interest payments.

I’d love to see those that run the Pickens United Meetings say to the school board/ district officials, you had your turn. Enough is enough. Your tax rate needs to come down.

During that time 5k-12 school enrollment (45 ADM) has actually fallen from 16,184 to 15,675. In 2006 at the Greenville Plan vote, I remember one of the board members saying, if we build all these schools they will come. My reply was, no they won’t – there are no jobs here! As the data shows, they never came – enrollment fell.

By the way most of the bond holders are not residents of Pickens County. So every year we dig deep into our pockets for the now $37.5 million in taxes to make the bond payment, and swoosh is the sound as that money leaves our county and it is spent and invested elsewhere. This has been going on 15 years now and will continue another 10 years until those bonds are paid off. A huge economic bite taken out of our county over a generation.

The total borrowing and interest over the life of the loan for buildings will be about $750 million (The initial loan with interest will run about $575 million over the 25 years and the additioinal borrowing and interest during that time will add about $175 million.) Three-quarters of a billion is excessive. Something needs to change here. The $220 in bond payments over the next 10 years is fixed. They owe that under contract. The borrowing as much as they can each year on top of that to stabilize the rate at 54 mills, is the part that needs to change and should change. The school board needs to find out what they need to maintain these buildings in working order and not a dime more. The cost is far too much at this point.