Tax hike might alienate businesses

Batesburg-Leesville school leaders think proposal could stifle owners’ generosity

By DEVON COPELAND - dcopeland@thestate.com

Businessman Randy Barnes tries to give at least $1,500 a year to Lexington 3 schools.

He doesn’t have to. All three of his children have graduated from the Batesburg-Leesville school system.

But as owner of Barnes Oil and Propane and three convenience stores in the area, the Lexington 3 graduate said he likes to give a little extra to schools.

“As long as I’m able, I will always help the school out,” Barnes said.

But school leaders are concerned tax hikes will deter business owners like Barnes from giving their time and money to schools.

They say a new state funding formula for education pits schools and businesses against each other.

In 2006, the state Legislature changed the way South Carolina pays for its public schools.

Homeowners no longer have to pay property taxes for school operating expenses. Instead, that expense is paid by a higher sales tax.

But businesses and owners of second homes, like the vacation getaways around Lake Murray, continue to pay property taxes to support schools.

In an effort to protect those taxpayers, the Legislature capped the amount schools can increase property taxes.

But state and local school leaders, concerned the new funding method could alienate businesses, have asked the Legislature to reconsider how the state pays for its schools.

“Schools and businesses are really in a symbiotic relationship,” said Bill Gummerson, Lexington 3 superintendent. “They are our strongest supporters. We don’t want to lose that.”

Barnes said he doesn’t want to stop giving money for trophies, class parties or field trips. But he must look out for his businesses.

“Whenever it gets to the point where I’m not making any money, I could see the future causing me not to do that anymore,” he said, adding, “It’s not fair that the legislators are putting the schools in this predicament, and it’s not fair to me.”

Both Lexington 3 and Lexington-Richland 5 school districts gave preliminary approval this month to budgets that would raise taxes on business owners.

Lexington 3 would increase its property taxes about $43 on every $100,000 worth of property, the maximum state law allows.

The district’s spending plan calls for giving teachers a cost-of-living raise and hiring one new teacher. To cut costs, the district is not planning to replace most retiring or resigning employees.

Lexington-Richland 5 board trustees gave final approval Monday to a $146.5 million spending plan.

The plan includes a tax increase of $59.40 on every $100,000 worth of business property, officials estimate. Its plan calls for hiring 16 new teachers and creating a nurse coordinator position to oversee medical care in the school system.

Lexington-Richland 5 board member Carol Sloop said it’s her duty to consider the needs of homeowners and business owners.

While she’s happy that homeowners’ property taxes have been cut, schools have increasingly higher costs to cover. That means businesses will face higher taxes, she said.

“Our businesses, by and large, have been so good to us,” she said. “They have been incredibly generous.”

S.C. Small Business Chamber of Commerce president Frank Knapp said school districts shouldn’t worry too much about higher taxes angering small-business owners.

“It’s always a mixed bag for small owners. Small-business owners live locally; they’re all homeowners,” Knapp said. “With the reduced property taxes, they’re probably pretty pleased.”

He said small-business owners are involved in schools because of their sense of community. “I don’t think there will be that much degradation of the support by local small-business owners.”

Don Gilbert — owner of a Wendy’s franchise near Lake Murray, an office and 10 acres of commercial property — donates to Lexington-Richland 5 elementary schools every year.

While he has no plans to stop his partnership with the schools due to higher taxes, he said he might consider raising prices at his restaurants.

“You can’t keep absorbing higher and higher taxes,” he said. “You have to pass it off to the consumer.”

As a parent, resident and business owner, Gilbert said he understands that schools need to maintain high standards to attract families and businesses.

“I’ve never complained about taxes,” he said. “But it’s always been equally divided between homeowners and businesses.”

Reach Copeland at (803) 771-8485.