Change to Tax Policy Considered by the Charleston County School District
The Charleston County School District’s Board of Trustees has given their preliminary approval to a significant update to the district’s policy on tax increment financing districts (TIFs). The development occurred during a meeting held on Thursday night.
Tax Increment Financing Districts Explained
A Tax Increment Financing district is a financial mechanism utilized for funding future projects. The school board has the power to decide whether to fund or participate in these districts. There was a need to modify the prevailing policy to ensure alignment with state laws.
The Heated Discussion and Supermajority Vote
The main change to the policy and crux of the debate on Thursday pertained to the condition of a supermajority vote. The existing TIF policy requires a supermajority of six board members out of nine, to decide whether the Charleston County School District would partake in a TIF. However, the newly approved policy needs only five votes, leading to intense discussions among board members.
Board Member Darlene Dunmeyer-Roberson voiced concerns, arguing that a decision of such magnitude shouldn’t be left to a simple majority.
Changes and Revisions Proposed
The conversation about the TIF policy revealed several proposed changes and revisions. Although the board eventually agreed on preliminary approval with a 5-3 vote, discussions ranged from retaining the supermajority vote in the policy to dismissing it as redundant.
Proposing the changes, the district’s Chief Financial Officer, Daniel Prentice, argued for more flexibility in future TIF district negotiations. He stressed the need for adherence to state laws.
Public Feedback
Members of the public also weighed in on the issue. Char Fitzwater, a county resident implored the board to ensure that a supermajority is required for any TIF with considerable impacts on school funding which may last up to 30 years, adding CCSD may face increasing financial pressure for an extended period.
Implications of the Move
The timing of this discussion is particularly important. The City of Charleston had recently voted to set up a TIF to stimulate growth and redevelopment of Union Pier. This move potentially benefits the district. However, Dunmeyer-Roberson cautioned against making policy adjustments in anticipation of proposed projects.
The redeveloped Union Pier, currently a non-revenue generating area, could potentially generate an estimated $22 million for the district. The caveat is that the District would have to wait until the end of the 30-year financing period to collect the funds.
Next Steps
The policy change, despite having received preliminary approval, still needs to be ratified via a second reading during the board’s next meeting in September. Other updates to the policy in compliance with state law include a requirement for the Charleston County School District to hold votes on establishing the TIF district within 45 days.
