Local School District Revenue
By Alex Saitta
February 17, 2015
A few weeks ago Tom O’Hanlan’s (leader of Manufacturers Caring For Pickens County) wrote a letter where he stated Pickens County schools need a tax increase to restore funding to 2007 levels. I responded to his letter in the paper last week, but this is a more detailed response.
Reading Mr. O’Hanlan’s letter I can tell he hasn’t examined the financial statements of the school district. Likely he is just repeating what Concerned Citizens of Pickens County (Robin Nelson Miller spokeswoman) has written numerous times, which is untrue.
Concerned Citizens of Pickens County (CCPC) falsely claims, “The local tax contribution in Pickens County has been in steady decline since 2007, and today, it is approximately $5 MILLION less than 7 years ago. Costs have increased. Local funding has decreased.”
First they made the mistake of looking only at local property taxes. That is only half of the local tax revenue story since Act 388 was passed in 2007.
In 2007 the state legislature passed Act 388 which removed property taxes from homes people lived in, but simultaneously raised the county sales tax by 1 percentage point from 6% to 7%. It was a tax swap of local taxes — a local property tax decrease AND a local sales tax increase.
Looking at the year to year audits at that time, local property taxes went down in 2007-08 by $5,353,990 — CCPC’s point because property taxes on owner occupied homes was eliminated. However, the local sales tax went up by $8,730,940 — what CCPC is missing and unaware of. The line is 3825 Reimbursement for property tax relief (Tier #3) was added that year to reflect the increase in the local sales tax rate. The sales tax is charged locally, collected by the state and given back to the local district.
CCPC saw the $5.3 million decline in local property taxes and wrongly concluded, local tax revenue fell $5 million!!!! Never asking gosh that is a huge decline — how could the district function with that? CCPC just ran with half the story telling everyone local taxes were cut and the district has this huge gapping hole in its budget. Add it to the list of mis-information — the district is about to lose its accreditation, schools are going to be closed, etc. All untrue.
The other thing CCPC missed was, they only looked at the general fund account. They forgot to look at the debt service account which is also locally funded. (The school district had six major funds or accounts.) The debt service account seen a huge increase in local tax revenue for our schools.
Going to the school district’s financial audits of 2007 and 2014. Local funding for the district’s general fund is up from $34.7 million in 2007 to $41.7 million in 2014. For the debt fund, local funding is up from $7.3 million in 2007 to $23.5 million in 2014. Local funding is up, not down.
You don’t have to look at the numbers to see the truth. The district spent $387 million to build 7 new schools and renovate the other 20 schools. Just drive by the new high schools, with all their acreage, massive square footage and 24-7-365 lighting, you’ll see why they cost $45 to $60 million to build. Gosh, just the football stadiums alone were $3 million each. Do they think the money just fell out of the sky? It was all locally funded with additional tax revenue.
In 2007 the average teacher salary was $44,000. Today that figure is close to $50,000. Retirement, medical, workers compensation costs are much higher today. How does O’Hanlan/ Miller think those increases are being paid for, bake sales? Higher local tax revenue is funding a good chunk of those increases.
There is a bad combination at work over there with CCPC -- a lot of zeal because they so want taxes raised, a lack of understanding of the history and of school district accounting, Facebook allows anyone to put anything on their page without someone checking the facts or the logic, and CCPC blocks those who oppose their views or want to correct their figures. As a result there has been a lot of mis-information published on CCPC page. .
In the end, both Robin Nelson Miller and Tom O’Hanlan lead liberal organizations both advocating another 13 mill tax increase for Pickens County Schools over the next 5 years. That increase would follow a nearly 40 mill increase for schools the last few years. I and others advocate a fiscally conservative point of view that the school district should first better manage the money is already receives before it raises tax rates again. Hence, the crux of the public debate when it comes to school financing that has been taking place for a couple of months now. It is a healthy debate.