Education

A manufacturer complained about its tax bill. Now an SC school district will lose $1M

York County's Resolute Forest Products in Catawba is the largest North American producer of uncoated groundwood paper, the grade typically used by newspaper publishers.
York County's Resolute Forest Products in Catawba is the largest North American producer of uncoated groundwood paper, the grade typically used by newspaper publishers. File photo

The Rock Hill school district is looking at a tax revenue loss of more than $1.2 million this year.

The district’s largest taxpayer, the former Bowater plant that is now owned by Resolute Forest Products, recently filed an appeal with the S.C. Department of Revenue over its assessed property value for tax years 2015, 2016 and 2017, said Terri Smith, chief finance officer for the district.

The appeal has resulted in a loss of $1.2 million in tax revenue to the school district this year, and a loss of $530,000 in revenue annually, Smith said.

“This is a rather large percentage of our operating budget,” said Rock Hill school board member Helena Miller. “It’s a lot of money.”

In June, the school board approved a $151.2 million budget for the 2017-’18 school year.

The Catawba area plant employs close to 500 workers and produces specialty paper and market pulp, according to the company’s website.

The manufacturer claimed the tax assessments were excessive due to economic challenges facing the paper industry, said Bonnie Swingle, spokesperson with the S.C. Department of Revenue. A settlement reduced Resolute’s taxable real property.

With a shift to electronic communications, Resolute has experienced lower demand for various types of coated paper products, such as catalogs, flyer inserts and magazines, spokeswoman Debbie Johnston told the Charlotte Observer in June. The company suspended use of one of its paper machines on June 30 and laid off 180 people.

“With so much communication shifting to digital, it has an impact on the paper market,” Johnston told the Observer.

The school district’s administration has requested that the school board approve moving $1.2 million from the district’s fund balance to cover the loss, Smith said. That would leave the district with 20 percent of its funds remaining in its rainy day account.

Under district policy, the district must have at least 17 percent in the fund balance, Smith said.

Smith presented the request to the board at its Monday work session. The school board is set to vote on the request at its Nov. 27 business meeting.

When the district plans its 2018-19 budget, it will have to factor in the $530,000 loss in revenue, Superintendent Kelly Pew said.

“As we move forward and begin planning for next year’s budget, we’re going to be ($500,000) short of what we have been in the past due to this,” Pew said. “This is going to be an ongoing assessment.”

Amanda Harris: 803-329-4082

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