County schools paint bleak budget picture 

Can't Get Worse — 'Til Next Year

Budget season for the Charleston County School District doesn't start for another few weeks, but officials have been doing their best over the last month to paint the most dire picture possible. Words like "brutal" and "the perfect storm" were used often during a sparsely attended meeting at Burke High School laying out the $25 million to $27 million hole the district has found itself in.

The hits are coming from a number of directions: annual state set-asides that have protected Charleston from a shortfall are again in flux, federal and state aid for specific programs is coming in short, and there's an additional $14.7 million needed for mandated costs like pay increases for teachers and health care.

Recognizing that every budget year would be more trying than the last, District School Board members already require staff to seek out cost-cutting measures to trim the fat.

"But you can only cut the fat so many times before you get into the bone," says Jon Butzon of the nonprofit Charleston Education Network.

District staff has been able to close the budget gaps in the past, says District Superintendent Nancy McGinley, but she's pessimistic about bridging this year's divide.

"Every decision we make will be based on what is good for the children," she says.

The federal funding for Title I programs, which targets disadvantaged students, will be cut by $3 million. State funding for troubled schools will fall $5 million as South Carolina's limited funds are spread thinner over a growing number of needy schools statewide. For example, Burke High School received $600,000 last year to improve its state ranking, but this year will get only $250,000. The district is pulling any available discretionary funding to reduce that hole, but there's not much money to go around, McGinley says.

There's one bright spot: local revenue. The district is estimating it can pull another $10.3 million in property taxes from the new construction of businesses or residential property that isn't owner-occupied. Homeowners received a tax break this year through a 1 percent increase in the state sales tax.

But the shortfalls are far greater, due to the state's funding structure. For nearly two decades, South Carolina has paid for schools based on each community's ability to fill gaps with local taxes. For decades, that's meant that every year Charleston grows, the state provides less money, with the expectation that the county's new taxpayers can cover the difference. But the state's sales tax swap put the funding stream in the state's hands. Legislators also capped potential tax increases for the remaining property in the county, further limiting the district's ability to replace lost state dollars.

"We can no longer determine that we can make up what we don't get from the state locally, regardless of what the needs may be," says Michael Bobby, the district's new chief financial and operations officer.

A long-term solution to the funding formula has been batted around by local legislators for years, but it's been difficult to find traction in a Statehouse with so many districts unaffected or benefiting from the current formula. Butzon and others have worked with state Superintendent Jim Rex to develop potential changes, but they're not cooking this year.

"They aren't even on the back burner," Butzon says. "They're sitting on the counter beside the stove."

To make up the difference in regards to the general funding formula, local legislators led by Senate President Pro Tempore Glenn McConnell, have promised to find nearly $11 million to replace what Charleston has lost to smaller districts. While those promises were comforting in the past few years when the state budget looked plentiful, there's reason to wonder if this year's tight budget will make finding the money difficult.

McGinley and others have only vaguely alluded to what would happen if the district doesn't get its state aid or if it's unable to make up the rest of the shortfall, saying, "We'll have to make significant reductions just to meet the status quo." If cuts need to be made, they'll come first from the administrative offices, McGinley says, predicting a 15 to 20 percent cut. But after that, the savings could have to come from the schools and classrooms. Then there's the impact on new projects the district had hoped to implement this year, including additional after-school tutoring, reducing class sizes, improving libraries, and expanding early childhood programs.

"That additional support will cost money we don't have," McGinley says.

Regardless of how this budget season shakes out, district staff will have a new mountain to climb when budget preparations begin for next year, when state coffers will be thinner as mandatory increases go up.

"(McGinley's) calling this 'the perfect storm,'" Butzon noted. "I don't know what she's going to call it next year, because it's going to be worse."


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