Property tax compromise sparks concern

School officials in Spartanburg County on Wednesday expressed concern that the state Legislature's hastily approved compromise property tax relief plan could do irreparable harm to public education.

"We're in a sad state of affairs when our General Assembly passes legislation impacting schools and children without sending the school districts any information relating to how it may impact those children," said Spartanburg School District 6 Superintendent Darryl Owings. "I thought we were a lot more advanced than scratching out details on the back of a chicken box in the 11th hour."

Although some calculations were indeed made on the food container, that's mostly legend, said Sen. Jim Ritchie, R-Spartanburg, a member of the conference committee that worked out the compromise approved Wednesday. The notion that the plan was a rush job also is folklore, he said.

Ritchie said that thousands of hours of work -- from meetings held around the state starting last year, to conference work in the House and Senate, to floor debate in both chambers -- went into the body of work that the conference committee condensed into the final version.

That version:

(bullet) Raises the state sales tax by a penny, to 6 cents on the dollar beginning June 1, 2007. Groceries and hotel rooms are exempt from the increase.

(bullet) Lowers the sales tax on groceries from 5 cents to 3 cents on the dollar, effective Oct. 1.

(bullet) Creates a one-time sales tax holiday for the Friday and Saturday after Thanksgiving.

(bullet) Includes $28 million to guarantee that the poorest 18 counties do not receive less than $2.5 million for operations from the increased sales tax.

(bullet) Limits the amount that school districts and counties can raise millage rates to population growth plus inflation.

(bullet) Caps increases in taxable value at 15 percent over five years.

The higher sales tax will generate about $582 million, with about $527 million going to eliminate school operating property taxes from owner-occupied homes. The remaining $55 million, plus $15 million taken from the general fund, will be used to remove county operating property taxes.

Homeowners will still pay property taxes for school and county bond debt, as well as for municipalities and special purpose districts.

The money will be returned to school districts on a dollar-for-dollar basis in the first year. After that, funding increases would be based on a weighted per-pupil basis with the addition of a poverty factor for students eligible for free or reduced lunch.

Some lawmakers voted for the proposal on Wednesday without ever having seen it. That, Ritchie said, is sometimes how the process works.

"The product was able to be clearly described and understood because members had dealt with the issues for over a year," he said. "It's a very fine process that worked deliberatively and thoroughly."

Rep. Lanny Littlejohn, R-Pacolet, agreed that the plan was handled the same way many pieces of legislation are handled in the session's final days. But he said it would have been nice to have had more time with the final product.

"There are so many things in there that will have to be readdressed next year," Littlejohn said – citing working on the funding formula and determining whether the $2.5 million for the poorer counties goes to the classroom or administration. "That's the bad thing about doing these things in the last days."

District 2 Superintendent Scott Mercer said he questions whether a 1-cent sales tax increase will cover school district budgets and whether he'll be able to add personnel as his student population grows.

Calculations from the state budget and control board originally projected Spartanburg Districts 3 and 4 gaining about $500,000 during the first year, but a spokesman said Wednesday that those were old figures. District 3 Superintendent Jim Ray said he doesn't expect his system to gain any money in the first year, and that he expects to lose money beginning in the second year.

"Beginning in 2008-09 and getting worse every year on, there won't be enough money to sustain programs in districts that have gone beyond the average," Ray said.

District 5 Superintendent Scott Turner said he's equally concerned about losing local control and about the financial impact.

"Our main concern has been the redistribution formula and did (legislators) take into account districts like us who are growing," Turner said.

Rep. Scott Talley, R-Moore, said he shares some of the same concerns.

"Districts that have been able to provide programs above and beyond the basics while still keeping spending in check fear they are going to lose that ability, and based on what I've heard so far that autonomy is going to be taken away," Talley said. "I would hate to see the quality of education and programs that have enhanced educational opportunities for students in Spartanburg be compromised by this legislation."

House Speaker Pro Tem Doug Smith, R-Spartanburg, vowed the local delegation would fight to protect funding for the county's schools. But he said that school officials around the state share the blame for the current situation.

"If they had done their jobs and held the line on taxes in their districts, we wouldn't have this problem," he said.

Robert W. Dalton can be reached at 562-7274 or bob.dalton@shj.com.

Ashlei N. Stevens can be reached at 562-7425 or ashlei.stevens@shj.com.