AIKEN - South Carolina's cash-strapped public schools are bracing for two events that could worsen their already grim balance sheets - a judge's ruling on a lawsuit that claims a wide educational gap between rich and poor districts and a legislative proposal to eliminate property taxes as a prime source of revenue.
Although separate and yet to be resolved, the lawsuit and the legislative proposal could mean major changes in the financial structure of South Carolina's 86 school districts, education officials said Monday. Both also threaten to curb the fiscal freedom of local school boards and to conflict with other education mandates, such as the federal No Child Left Behind accountability law.
"Both could change the way education is funded in South Carolina," said Republican state Rep. Roland Smith of Warrenville, the chairman of the K-12 education budget subcommittee of the House Ways and Means Committee. "Absolutely. Dramatically."
The lawsuit, still being heard by a Clarendon County circuit judge in Manning, alleges that South Carolina's formula for funding schools violates a 1999 state Supreme Court decision that said children must have the opportunity for a "minimally adequate education." The suit contends that the state formula doesn't consider the high cost of teaching poor children.
Plaintiffs' attorneys have also argued that poor districts have a smaller tax base than rich districts.
In some similar cases, judges have ordered rich districts to give some of their tax dollars to the poor or states to give more money to the needy schools.
"The richer districts are able to do more and have the ability to add to the millage rate, and, because parents want to give their children the best education possible, you don't hear too many complaints," said Mike Jackson, the chief financial officer for Clarendon County District 2 schools, one of the lawsuit's plaintiffs.
The legislative proposals include a bill introduced late in the previous session by state Reps. Richard Quinn, R-Columbia, and Vincent Sheheen, D-Camden, that would eliminate local property taxes as a revenue source for schools, substituting a 2-cent increase in the South Carolina sales tax.
Without property taxes, which raise about $1.8 billion in school districts across South Carolina, local school districts would be almost totally dependent on the state for revenue.
Schools would also face a more volatile flow of cash, said Brock Heron, comptroller for the Aiken County school district. Mr. Heron, Mr. Jackson and eight other school finance officers have made a counterproposal - a 2-cent increase in the sales tax, earmarked for public schools, coupled with a 100-mill cap on local school property taxes. That would result in a tax rollback in richer South Carolina counties, such as Aiken.
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