Lexington County may alter school aid plan

tflach@thestate.comJuly 28, 2013 


— Lexington 4 classrooms would be the big loser while those in Lexington-Richland 5 would be the only winner from a change proposed in allocation of fees from industrial areas developed by Lexington County.

Some County Council members want to revise the allocation plan to help hold down taxes on businesses through a change that also benefits schools surrounded by more commercial development.

If adopted, that change could reduce the amount that will go to classrooms everywhere but in Lexington-Richland 5, home to utility power plants and the Harbison retail center.

Lexington 4 in the Gaston-Swansea area faces the biggest cut since it is largely rural, with the other three districts receiving smaller reductions.

The amounts involved aren’t large initially, but the impact of the change will multiply significantly as more firms settle in industrial sites for which every county taxpayer is footing the bill, some council members say.

A push for the change comes as the first payments to schools begin next year.

“If there needs to be adjustments, this is the time to do so,” councilman Jim Kinard of Swansea said.

But Kinard, a former Lexington 4 school board member, opposes altering the plan.

Altering ‘Robin Hood’

The interest in change is the first attempt to revamp a groundbreaking deal under which schools agreed in 2007 to share the wealth from the industrial sites.

That agreement is designed partly to help schools in communities with less development — particularly Lexington 4 — improve instruction and keep pace with neighboring classrooms supported by larger property tax income.

The set-up is nicknamed “Robin Hood” because it aims to help poorer schools.

Supporters of the change say no one realized that the burden of school tax hikes since adoption of the allocation plan would fall on business due to limits on residential taxes set by the Legislature.

“Those paying the bills need some relief,” councilman Todd Cullum of Cayce said.

But the change sought is raising concern that it would turn the revenue-sharing plan into Robin Hood in reverse by taking away from classrooms in less-developed areas.

That idea is “going backwards,” Kinard said.

At stake initially is the division of as much as $1 million among schools, according to preliminary estimates.

That comes largely from fees paid by the new Amazon distribution center and SCANA utility facilities, both near Cayce.

The pot will increase soon as more fees come from Nephron Pharmaceuticals and other companies.

For now, Lexington 4 could lose up to $20,000 annually at first, with Lexington-Richland 5 gaining as much as $40,000. Loses for other schools are projected to range from $4,000 to $9,000.

But the gap in revenue-sharing will grow as more industry opens, Kinard says.

The area where Amazon and SCANA are located eventually could generate $6.5 million in fees yearly, officials estimated when the school aid plan was adopted.

But that pot is likely to increase — some forecasts put it at $10 million eventually — after that industrial area was enlarged last year.

Businesses paying the fees wouldn’t be affected by any change in the allocation plan since their amounts are set in agreements with county leaders.

So any commercial tax break given would go to others, many of whom are small operations upset that recent school tax hikes fall solely on businesses.

Sharing the wealth

The school aid allocation plan now is based equally on enrollment and population in each school district.

It gives each a piece of the pie instead of earmarking it all for the one in which the industrial sites are located.

County leaders say it’s fair to share the wealth since taxpayers in each are paying for the sites.

Some council members want to replace the population part with each district’s share of countywide assessed value, saying that measures county economic growth annually and is a better tool than sporadic population estimates.

The impact of the commercial tax break sought could be reduced if council members blend assessments into the allocation plan, keeping enrollment and population as other factors that determine amounts given schools.

But even that takes away from schools with less development, Kinard said.

County leaders earmarked the fees for schools as a way to provide a better-educated work force for corporate offices and other industries.

Those areas are near Cayce and in Batesburg-Leesville, with a new one planned in Chapin.

The fees are incentives luring businesses to the county, letting them pay less for negotiated periods than property taxes that would be due.

School officials in Lexington-Richland 5 say the proposed aid allocation change is being studied. Lexington 4 officials couldn’t be reached.

Some council members – including one from Lexington-Richland 5 – are reluctant to alter the allocation pact.

Any change shouldn’t tilt heavily in favor of some schools at the expense of others, councilman Johnny Jeffcoat of Irmo said.

“We don’t want one glaringly benefitting while the others lose,” he said. “That’s not the intent.”

Dividing the pie

Here is the impact of the allocation plan adopted and changes proposed for sending schools revenue from industrial areas developed by Lexington County:


Lexington 1 48.8%/ 47.9%

Lexington 2 21.9%/ 21.5%

Lexington 3 4.4%/ 3.7%

Lexington 4 7.1%/ 5.1%

Lexington-Richland 5 17.8%/ 21.8%

Source: Lexington County planning staff

Reach Flach at (803) 771-8483.

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