School district asks for millage increase
by The Press and Standard | June 21, 2018 5:00 pm
Last Updated: June 20, 2018 at 10:09 am
The Colleton County Council has been asked to increase the millage for the Colleton County School District by 4.40 mills.
The request was made in a resolution approved by the school board during a special meeting held by the board on June 14.
The millage increase would come in two forms.
The school district is asking the council to approve an increase of 2.35 mills, the amount of increase allowed for the 2019 tax year by state law. Legislators established a formula based on a number of factors including population to be used to set the maximum amount of mill increase allowed.
Another 2.05 mills increase requested by the board represents the millage increase the school district was allowed to seek but has not been sought in the previous two tax years.
According to the school district, the millage increase would generate $581,007 in additional revenue that would be used to assist with salary expenditures. The school district’s current millage rate is 110.43.
The request for a millage increase comes as school administrators continue the work on the latest draft of the proposed budget for the 2018-2019 fiscal year that estimates a General Fund of $44,676.757 — $1,227,891 above the current fiscal year.
Revenue to cover the day-to-day operations of the school district comes from three primary sources: local, state and federal funding.
The school district is predicting that local revenue sources for the next fiscal year will be $15,586,578, an increase of $777,246 over this current fiscal year. The bulk of that local revenue comes from the ad valorem property tax revenue. The school officials are projecting that the property tax revenue will be $15,275,438, an increase of $822,106 over this fiscal year.
Finance Director Emily Temple said the local revenue projections were made including the 4.40 mill increase the county council is being asked to authorize. It is projected that the revenue provided by the state will amount to $29,040,179, an increase of $450,645 over this fiscal year.
But Temple says a governmental change in the definition of students in poverty could end up costing the school district revenue. Both the state and federal government provide school districts additional funding based on the number of low-income students enrolled in the district.
In the past, the state and federal government based their students in poverty funding levels for a district on one criteria. If a student had been determined to be eligible for a free or reduced-price breakfast or lunch, they were to be listed among the district’s students in poverty.
Then in about 2013 the United States Department of Agriculture altered the criteria for the free and reduced breakfast and lunch program.
If a high number of students in a district were eligible for free and reduced meals, then the district could seek to have the free and reduced meals available to every student in the district. When that change was made, approximately 86 percent of Colleton County’s students were eligible for the community-wide program. As more and more South Carolina school districts became eligible for the designation, the meal program was no longer used as a barometer to determine how many students in poverty were living in a district.
For years, the state has been attempting to come up with a different barometer, seeking to have information collected by other state agencies used to establish a new definition for students in poverty.
This year, state officials might get around to changing the definition and a number of projections have been made about how much that change is going to cost school districts. Temple said every school district in the state is anticipating a decrease in funding because of it.
When building a budget, Temple said, officials have to be conservative in the revenue projections. That means in determining the extent of the loss, she added, the district has to consider the worst-case scenario.
The proposed change, in the worst-case scenario, would see the school district losing $332,650 from the Education Finance Act.
A portion of that decrease would be related to an anticipated drop in enrollment, but most of it would be attributed to the change in definition.
Then, she said, the federal government, in its funding for students in poverty, is expected to use the definition the state has established.
That worst-case scenario would translate into a loss of $472,279 in federal funding.
At the same time the school district is faced with the possibility of losing funding, state mandates are expected to cost the district $531,629 for salaries, $248,026 in retirement costs and $165,261 in insurance.
The school administration is still working on its proposed fiscal year 2018-2019 budget and has approved a resolution that will allow it to continue working on the financial documents past the June 30 deadline for having it approved by the school board. The fiscal year begins on July 1.
The school district can’t formalize its budget until the state finishes its work on school funding.
Temple said the latest word out of Columbia is that the work should be done near the end of June.
That means the school district will not be able to finalize the budget and have board approval before the start of the new fiscal year.
That made the resolution adopting a continuing budget necessary for the next fiscal year.
The state’s guidelines for operating under a continuing budget does not allow funds being spent or obligated in the new fiscal year to exceed the appropriations in the previous year’s budget.