New laws will strip District Five funds

by Kenneth B Loveless and Cathy Huddle

Tax increases, staff shortages and larger classes may be result

Most new citizens came to our community primarily for our great schools and our schools provide the
backbone of our way of life.

But a new school funding formula has passed in the budget of the SC House will reduce state funding for
District Five Schools by $4.6+ million. This reduction is the result of a new formula which provides a
smaller allocation of state funds to our district. Most disappointing is the fact that the formula now
used to determine each district’s allocation is based on a weighted pupil average that will decrease the
weighting for technical education from 1.29:1 to 1:1. This means that districts, like LR5, that are
concentrating on career-ready skills, will have to change course in mid-stream. The path toward gaining
an education, and a high-paying career, without incurring significant student debt, has been dealt a
severe blow. There is a “hold harmless” provision but such budget provisos are only assured for one

In addition to our reduced allocation, the House voted to increase teachers’ salaries by $4,000.00 per
year as well as increase bus driver salaries but provided no money. The budget also increased the
employer retirement contributions, but without funds, and did not provide the funds for an 18.1%
increase in health insurance costs. We strongly support the increase in teacher and bus driver pay – but
the state should fund these increases.

The net result for our district from our reduced allocation and unfunded cost increases will be an annual
shortfall of over $20 million.

The operation of schools in SC is funded locally from property taxes. Primary Residences don’t fund the
operations of your schools. Since the passage of Act 388 over 15 years ago, the funding burden has
fallen primarily on automobiles and businesses. Our district is made up of bedroom communities. We
don’t have a big business tax base. To attract and retain businesses and employers, this board has tried
to keep the tax burden low. Even if we maxed the increase in millage on automobiles and businesses to
the legal limit, it would raise only approximately $9 million. That will leave an $11 million shortfall
annually. To us, personally, tax increases should be a last resort and only used when budgets have been
scrubbed and other avenues fully exhausted.

Some legislators have pointed to the availability of operating fund balances. School districts maintain an
operating fund balance for several purposes including differences in payment/disbursement timing for
cash flow, possible shortfalls in projected tax collections, and the unforeseen changes in state budgets
(as is happening currently). Thankfully, D5 currently has such a fund balance; but it cannot support more
than 1-2 years of such a budget reduction.

What will have to change? Larger class sizes might result. Staff positions for social workers,
psychologists, interventionists, academic coaches, and others might have to be eliminated. Technical
education opportunities may need to be scaled back. And the property tax millage may have to be

The budget bill has been passed to the SC House. Next it moves to the SC Senate. Last week we and our
superintendent, Dr. Ross, met with one of our senators to discuss this dire situation. We are hopeful
that he will work with other senators to address the shortfalls in the proposed education budget.
While spring is a season of hope, we can’t leave it to chance. Please contact your state senators and the
governor to let them know of you concerns.

Kenneth B. Loveless

Vice Chair District Five Board of Trustees

Cathy Huddle

Member District Five Board of Trustees