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COLUMBIA -- The South Carolina Supreme Court on Monday ruled that a school financing system similar to that set by the Pickens County School District isn't a violation of the state's constitution.

At issue was the financing plan used by the Colleton County School District adopted in September 2006 to renovate its existing school facilities and acquire new ones.

The plan is similar to the method used by Greenville officials to renovate and build facilities in about five years that would normally have taken two decades to complete. Smaller school districts in the state like Pickens and Colleton have turned to the plan as a means of constructing new schools when voters have rejected bond referendums.

Lawmakers have since passed legislation, effective next year, that includes installment-purchase plans like Colleton's and one with the Pickens County School District in the law limiting school district debt and therefore making the practice illegal starting Jan. 1.

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Chief Justice Jean Toal, writing for the court, concluded that Colleton County's plan doesn't meet the current law's definition of a financing agreement.

"We therefore determine that the school district has not exceeded its constitutional and statutory debt limit," she wrote.

"We further hold that the school district has committed no violations of its procurement code, and we find in favor of the school district on the remaining causes of action."

Pickens School Board Chairwoman Shirley Jones praised the ruling.

"I am so happy for the community that the Supreme Court has issued a favorable ruling," she said. "The district can now proceed in good faith to provide much-needed facilities for the children, the teachers and the community."

Chuck Saylors, chairman of the Greenville County school board, said he was pleased with the ruling.

"I think it's wonderful," he said. "I think all the school districts in South Carolina, irregardless of size, should have everything at their disposal to build schools that are adequate, safe and state of the art.

"If school boards choose to move forward with what many call the Greenville plan, then that should be an alternative the board has at its discretion."

Alex Saitta, a Pickens County school board member who opposed his district's plan, said he was disappointed with the ruling.

"By using the dummy corporation, the lawyers cooked up a legal scheme to circumvent the constitution and take away the citizens' right to vote on all this borrowing," he said.

Under the Colleton County plan, the district agreed to convey its facilities to the South Carolina Association of Governmental Organizations, which created a corporation to fund the renovation. The district then agreed to lease the land to the corporation, which was to issue revenue bonds to finance the construction.

The district can purchase the facilities back by making annual installment payments.

Colleton County Taxpayers Association, the South Carolina Public Interest Foundation and others had sued the district, alleging that the deal violated the state's constitutional limit on the amount of debt a district can incur as well as the county's procurement code.

Colleton County voters in 1998 rejected a $42 million school bond referendum, according to the court, and rejected a $39.5 million plan in 1999. The financing plan at issue would involve about $90 million in bonds, according to the court.

Under the state's constitution, school systems may not enter into financing agreements without voter approval if the agreements and the current system's debt exceed 8 percent of the assessed value of taxable property in the district.

Financing agreements, according to the court, are those which use funds from any source other than general obligation debt to fund construction or renovation of schools.

The plaintiffs argued that the Colleton County plan was a financing agreement because it didn't limit the source of funds to general obligation debt. The justices, however, found that wasn't enough to make the plan unconstitutional.