Charleston School District and Union Pier TIF Finance Plan
The Union Pier Tax Increment Financing (TIF) plan, a financial development initiative, is expected to have implications for Charleston schools in South Carolina. The TIF plan is being proposed as a part of the redevelopment of Union Pier, a 65-acre waterfront site. The city council had an initial vote on setting aside its share of the property tax collections from the site for 30 years.
The Concept of the TIF Plan
A TIF district would permit the city council to invest its share of property tax collections from Union Pier and a few neighboring privately-owned properties into public improvements. These improvements are anticipated to encompass parks, drainage upgrades, and affordable housing provisions. Upon formal approval, these tax collections would be allocated to a special account, and future city councils will decide on their expenditure.
The Role of the Charleston County School District
The Charleston County Council and the Charleston County School District are also expected to decide if they will forego their shares of the property tax revenues from Union Pier. This move would allow future city councils more funds for more improvement projects. The city council’s meaningful contribution to local economic development and revitalization efforts might make their agreement more likely.
However, the choice becomes more complex for the school district, whose principal duty is centered on children’s education. It remains uncertain whether a compelling reason exists that warrants the school board to forgo future tax income. The board should consider if there are any financial benefits to public education that equal the financial commitment being asked of the school district.
Changes in Policy Approval
Presently, the Charleston County School Board is revisiting its approval policy for TIF arrangements. Members recently voted in favor of amending the policy to necessitate the outlining of terms in an intergovernmental agreement (IGA). This agreement between the school district and the entity requesting the TIF must illustrate a significant financial benefit to the school district from the creation of the TIF district.
Future Implications for Education
The School Board now faces the challenge of balancing financial strength and agreeability to the TIF proposition. As previous iterations of the board had approved several other TIFs, they’ve seen an annual drop of $20 million in property taxes for the district. Therefore, the board needs to ensure they secure a significant return to compensate for any future revenue losses.
Although the TIF proposal is likely to bring forth enhancements to infrastructure, parks, affordable housing and water access along the Cooper River, it is estimated to cost taxpayers approximately $400 million. As a result, the School Board is under pressure to facilitate city development without compromising future educational resources for schoolchildren.
The expected impact of the Union Pier TIF finance plan on Charleston schools highlights the importance of finding a suitable balance between economic development and educational commitment. As developments unfold, local officials must ensure that financial decisions do not adversely affect the generation responsible for the city’s future growth.
