Statement on the 2016 DCSD Sales Tax Referendum
[Editor’s note: This statement is in response to the the County Council meeting on September 19, 2016 that was printed in the News and Press on September 28: County council speaks on penny tax issue]
The Darlington County Board of Education voted this summer to place a sales tax bond referendum on the November ballot for the voters of our county to decide. Since then, there has been a great deal of misinformation circulating. As the public information officer for the Darlington County School District, I cannot endorse or oppose the school district’s referendum question. I can, however, share the events leading up to the Board of Education’s decision, as well as the facts of the ballot measure.
In 2003, voters approved a $48 million sales tax bond referendum to build three new schools (Darlington Middle, Hartsville Middle, and the Darlington County Institute of Technology) and renovate several others. The bond was to be repaid through a one-cent sales tax that would expire in 2030.
Through careful fiscal management, the Board of Education was able to pay down the debt ahead of schedule, saving taxpayers more than $32 million and cutting 12 years off the repayment cycle. As a result, the current one-penny sales tax is set to end in 2018.
With the current bond set ending soon and several aging schools requiring expensive repairs, the Board of Education decided it was time to address some of facility needs identified in a 2012 facility study. The Board identified six schools with critical needs. Through a series of community and parent meetings, it became clear community members preferred new schools instead of renovated schools.
Unfortunately, like the County, the school district is extremely limited in how it raises money to fund capital projects, such as new school construction. Under SC law (“Act 388”), school districts no longer receive operating funds from homeowner property tax. The law also places strict limits on operating millage and tax increases for school districts. Currently the Darlington County School District’s millage is exactly the same amount as the County’s millage.
Furthermore, like the County, the school district may incur general obligation debt in an amount of up to 8% of the assessed value of all taxable property in the district. If the district utilized the 8% debt capacity to fund the new facilities, the impact would be a potential increase of approximately 36 mils, more than doubling the current debt service millage rate for property tax owners in Darlington County. In an effort to build the needed schools without a significant property tax increase, the Board of Education began exploring the idea of a sales tax referendum.
The school district is not the only entity dealing with aging facilities. The Darlington County Council has been vocal about the need for a new courthouse. Recognizing that both the County and the school district have facility needs, the Board of Education worked with funding experts to find a way the County and the school district could work together.
The funding experts and lawyers found a way for the Board of Education and the County to present a joint sales tax referendum to the voters that would fund construction of the new schools and the new courthouse. The joint bond would have taxpayers paying slightly more than a penny in a new sales tax when the old sales tax expired, less than a penny increase over the current tax level. Over the course of the summer, members of the Board of Education approached county council leadership and county administrators, including Chairman Bobby Hudson, about the idea to create a joint sales tax to fund both projects.
Only after it was clear the County and County Council were not interested in working with the school district in pursuing a joint bond effort did the Board of Education decide to place a sales tax referendum for new schools on the November ballot. Unlike County Council, the Darlington County Board of Education met all the necessary deadlines and requirements to get the referendum on the ballot so the voters of Darlington County could decide the issue.
In November, voters will be asked to decide on whether or not they want to have a one-penny sales tax to fund the construction of three new schools to replace six aging schools:
• A new Darlington school will replace Brunson-Dargan Elementary and Cain Elementary
• A new Hartsville school will replace Washington Street Elementary and West Hartsville Elementary
• A new Lamar school will replace Spaulding Elementary and Lamar Elementary
If voters approve the referendum in November, the school district will use its fund balance to pay off the remaining debt from the 2003 penny sales tax referendum. The new one-cent sales tax would begin after the old penny sales tax expires. In essence, the penny sales tax would continue, and consumers would not see a tax increase. If the voters do not approve the referendum, the one-cent sales tax will expire in 2018.
The Darlington County School District has the information about the bond referendum on its website at www.darlington.k12.sc.us. Citizens who have questions about the facts of the referendum are encouraged to call the Darlington County School District Office of Communications at 843-398-8824.
[Editor’s note: This statement is in response to the the County Council meeting on September 19, 2016 that was printed in the News and Press on September 28: County council speaks on penny tax issue]
