County, School District Lock Horns

Debate Rages Over Plan for Nuke Money

WINNSBORO – If the air hasn’t been cleared between Fairfield County Council and the School Board of Trustees after their Oct. 7 joint meeting, then it may never be. Of the 90 minutes the two groups spent together at the Midlands Technical College campus, approximately 75 was spent on the airing of grievances, toying with semantics and dancing around fundamental questions.

When the dust had finally settled, a basic understanding appeared to have emerged as to what role the School Board will play in planning for the enormous influx of cash expected to flow into the County in the next five years from fee-in-lieu of (FILOT) ad valorem tax dollars from the two new V.C. Summer Nuclear Station reactors.

Rumors

County Council Chairman David Ferguson (District 5) sent the meeting off the rails from the opening gavel by declaring that word had gotten back to him that there were some School Board members who felt that the County had been shortchanging the District in recent years. Ferguson claimed that Fairfield County Schools spends more money per student than any other district in the state, so to assert that the County was shorting the District was inaccurate, he said.

Beth Reid, School Board Chairwoman, said the District was no longer at the top of the spending list, however. What Reid wanted to know, before discussing the future V.C. Summer FILOT money, was what arrangements had been made to cut the District in on the County’s recent FILOT agreements with Element Electronics, BOMAG and Enor Corp.

Milton Pope, Fairfield County Administrator, exhausted several long minutes explaining how FILOT agreements work (fees paid directly to the County by an industry, in place of ad valorem property taxes of which the District would, by law, receive a percentage) and said that FILOT agreements create an indirect benefit to the District by adding to the county’s assessed property values.

“The one thing we can acknowledge is that Fairfield County Schools have been funded substantially,” J.R. Green, Superintendent of Fairfield County Schools, said. “Whether we’re number 5 or number 1 or number 12, there’s no point in debating that. I don’t think that has any bearing on the question Miss Reid has asked. Her question is, for previous Fee-in-Lieu-of arrangements, with Element, with Enor, with other corporations, has there been a percentage identified to go to Fairfield County Schools?”

“The answer is easy,” Reid added. “It’s either yes or no.”

And the answer, Pope revealed at last, is No.

Who Controls the Spending?

Talk then shifted to how to plan for the future V.C. Summer revenues. County Council earlier this year announced it would partner with the Central Midlands Council of Governments (COG) to create a long-term strategic plan for those monies and Council has made meeting with the county’s other elected bodies part of that process. In late August, Council sat down with the state legislative delegation for the first of those discussions. On Oct. 7, it was the School Board’s turn.

“Does the County Council plan to have the School District submit items for approval or does the County Council plan to identify a certain percentage that will go to the School District?” Green asked. “I think that’s the fundamental question. There’s a lot of ambiguity in terms of how this is going to work. Are you talking about me submitting a plan to County Council . . . or are you talking about giving a percentage of the revenues to the School District and the School District approves or not?”

Ferguson said his vote on that question would be for the District to surrender its autonomy to County Council.

“If we’re going to downplay the ad valorem taxes, if we’re going to help the citizens down-draft that part of the taxation, can we say that we’re going to give the School District X amount of money to spend and we don’t have any idea about what that amount of money is going to be spent for?” Ferguson said. “As far as I’m concerned, my vote would be No. And I don’t know of any county in the state of S.C. that does it that way. Not one.”

But that is exactly how things work now, Green pointed out, with ad valorem taxes.

“That’s currently the structure,” Green said. “Ad valorem taxes are dictated by state statute, and so if we get a check for $12 million from the County, it’s not as if you come to the District to talk about how we spend that $12 million. The School District as an entity determines how those funds are spent. They have that kind of fiscal autonomy.”

Pope then asserted that the District was, in fact, not autonomous at all, citing a County ordinance that requires the District to seek Council’s approval of budgets that exceed the previous year’s budget by more than 3 mills.

“To my understanding and from my research, the School District is not fiscally autonomous in Fairfield County,” Pope said. “That’s something we need to get clarified, because I agree with you. If in fact the School District were fiscally autonomous, we wouldn’t be having that conversation. But you’re not.”

Board member Annie McDaniel (District 4) told Pope that the Board was partially autonomous in its budgeting, then went on a tangent of her own about how property taxes work. Residential property taxes do not go toward the District’s operational budget, she said, because of Act 388. She then claimed the County dipped into that property tax relief.

“Property is zeroed out, as far as property taxes go,” McDaniel said. “As you recall, when that happened, County Council should have not taken any of that millage. I think it was 30-something mills that went back to the citizens, and you all took about 10 or 15 mills of that. The citizens didn’t know, because they thought they were getting a tax break and so they were happy, but they didn’t get all the tax break they should have got because County Council ended up taking part of that millage and assessing it.”

Council members did not agree with McDaniel’s claim, but she remained adamant.

“Yes they did,” she said. “If anybody goes back and researches the last 15 years, they’ll be able to see it.”

And regardless of where the District ranks in per pupil spending, McDaniel continued, they should be spending even more.

“If we look at the condition of our students when they come to our school district, we probably need to be paying more than we’re paying to get them where they need to be,” McDaniel said. “Granted, we may spend some money – and I’m the first to fuss about it – that we maybe should not be spending, but every dime that comes to this school district we try to use for our children in spite of the conditions a lot of them live in.”

Ferguson then stated that the District had indeed come before Council in recent years for approval of a (2009-2010) budget that went up 7 mills.

“To say that we haven’t done what we’re supposed to do for the School District,” Ferguson began, but before he could continue, angry cross-talk drowned him out. Finally, Green brought the noise back down to a more reasonable volume.

“Mr. Ferguson, I have not heard that,” Green said. “If someone has said that here, I have not heard anyone say that County Council has not done what they’re supposed to do for this school district.”

“All that I was saying about the way that we’ve gone about coming to County Council or not needs to be clarified,” Pope said. “You asked a question I think is valid. If you are autonomous, then I would agree with you. If you are not . . .”

Green said he wanted to stay focused on the plan moving forward and not quibble over how autonomous the District may or may not be.

“I don’t think we need to get bogged down in whether we’re totally autonomous or partially autonomous, and I don’t necessarily think that’s the whole purpose of this meeting,” Green said. “All the School District needs to know are the intentions of the Council. Mr. Ferguson has already stated (that he) would not just give the District a percentage (of the FILOT) and let the Board of Trustees determine how those funds are expended. I think that’s very clear. I don’t necessarily agree with that, but at least I know how we move forward.”

That model clearly did not sit well with Board member Henry Miller (District 3), who may very well have offered the most eloquent speech of his career.

“So, are we partners?” Miller began. “I feel like County Council puts themselves on a pedestal. Mr. Ferguson, I am one of the ones who thinks that you think we have to come to you and beg. We’re supposed to be partners. If we are partners, we can work this out. We’re all elected officials. We have the same districts. We’re elected by the same people. If ya’ll want to give the School District 25 percent, then we can handle that; or 35 percent. But to say we’ve got to come to you every year, that’s not going to work. Not with me. I don’t feel that way.”

Councilman Dwayne Perry indicated that he differed from Ferguson on how the District’s portion should be handled.

“You run the School District,” Perry said to Green. “You’ve got a board that works with you. Making sure that we’re doing what’s right by statute, that’s all I care about. The way I look at it is you hire people who know what they’re doing, they do their job and you let them do it.”

How Much Is It?

Board members pressed throughout the meeting for figures, even estimates, indicating how much money V.C. Summer might be pouring into the county in coming years. While early estimates have put the annual take at anywhere between $80 million and $100 million, Pope and Council consistently sidestepped the issue.

“We can sit here and keep on beating this horse, but right now we don’t know,” Councilman David Brown (District 7) said. “As far as what we have done in the past with fee-in-lieu-of, the majority of it has been put in the budget just like ad valorem taxes. Has the precedent been set? No. The intent is to make the county grow, to get industry, to put money in infrastructure.”

The main thing that drives – or impedes – growth in Fairfield County, Brown said, is the school system.

“And we all know that,” Brown said. “As far as us spending money on economic development, building schools and giving ya’ll the programs ya’ll want or whatever, that’s the most important thing of all. Don’t lose focus. The number one thing to attract industry is still education.”

While agreeing with Brown in part, Board member Bobby Cunningham (District 5) said property taxes are also stunting the county’s growth potential.

“One of the things that deters people from coming into Fairfield County is the property taxes,” Cunningham said. “Property taxes have a big impact on us not being able to bring people into this county. Taxation needs to be addressed as well as this other stuff we’re talking about.”

Brown said property tax relief should be part of the plan, but a sudden and drastic drop in ad valorem property taxes would have a severely negative impact on the School District more than it would have on the County. The plan, Brown said, should entail a gradual “buy-down” of property taxes over the next several years. It had to be done carefully, he said, because the drawback could come in 20 years, when the FILOT agreement with SCANA expires and the energy company renegotiates based on the significantly lower millage rate. That could leave everyone scrounging for cash in the long run, if the County and the District were not prepared.

“We can all talk about the needs that we have and what we want to do, but fundamentally we have to be responsive to the tax payers,” Pope added. “We have to be responsible to the tax payers in these future plans, and also have the ability to reduce our taxation. I think we need to be doing that on a parallel graph.”

Buying In

As emotions leveled off, Pope addressed Miller’s impression of the County’s position and asked the District to contribute a long-range plan for the COG’s consideration.

“It wasn’t a point of making the School District come begging to the County,” Pope said, “but being a part of the plan so it’s in the planning document. That way people have a buy-in to what the overall plan is for the entire planning and not it just being a County document.”

Green told Council the District could have something submitted in a matter of weeks.

“We’re all going to be in this together,” Ferguson said, “to see where this county needs to go.”

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