School district asks County Council for compromise on tax district

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School district asks County Council for compromise on tax district

Published Monday, January 9, 2012   |  552 Words  |  

The Beaufort County Board of Education has asked the County Council to accept a compromise in a disagreement over a special tax district that it says has caused the school district to lose money.

The school district has argued that it has been shorted about $20 million in the past 10 years due to accounting errors related to the New River tax-increment finance district, formed in 2002 to finance the University of South Carolina Beaufort and Technical College of the Lowcountry campuses on U.S. 278.

The loss has caused the school board to dip into its reserves, and it is concerned that will continue. Eventually, spending down reserves could result in a lower bond rating, said Phyllis White, the district's chief operational services officer. That could mean higher taxes due to an estimated increase of $6 million in interest costs, White said.

The county has already agreed to begin to pay $8,600 for each of the 148 students who now live in the tax district, which includes the University Park, Old Fields and Riverbend neighborhoods. The district will receive about $1.2 million beginning in July.

The district wants to change how it funds the TIF. The district wants money to come from its state allocation rather than from general tax collections. It also wants the county to guarantee that the district not lose revenue from the TIF, as stated in the TIF agreement, White said. That, however, would mean adjusting the tax rate, which concerns some County Council members.

School board chairman Fred Washington Jr., who presented the compromise to County Council alongside White, said he hoped the dispute could be resolved without a lawsuit.

"We want to move forward without legal action," he said. "We want to resolve this."

Elected officials, county staff and district staff have been meeting in an effort to resolve the dispute for six months. Washington said he would like to see it resolved within the next week, as the district is beginning to plan its next budget.

County Council Chairman Weston Newton referred the issue to the council's Finance Committee. Its chairman, Councilman Stu Rodman, said the issue won't be resolved within a week, but it will be put on a "fast track."

The next Finance Committee meeting is Jan. 17, but it was not clear Monday if the TIF issue would be discussed then.

Newton said after the meeting that the county believes it is in compliance with the TIF agreement and that the changes the school district has requested would mean a tax increase or the district opting out of the TIF.

"I'm hopeful we can find a resolution," Newton said. "The last thing I want is for there to be litigation."

Follow reporter Rachel Heaton at

Related content:

Beaufort County schools shorted $9 million since 2002, district officials say; June 6, 2011

School district: Accounting error necessitates tax increase; June 21, 2011

County, school district at odds over special tax funds; June 23, 2011