Lexington District One begins 2018–2019 budget process
Lexington, SC - On Tuesday, April 24, 2018, during a special board meeting, a budget workshop, the Lexington County School District One Board of Trustees, Lexington County School District One administrators presented a proposed 2018–2019 general fund operating budget that included school safety initiatives.
District administrators call these safety initiatives “Project Hope” because they serve both the emotional and behavioral needs of students through the addition of a Board-Certified Behavior Analyst, who is trained to provide and supervise behavior, Applied Behavior Analysts, who use techniques and principles to bring about meaningful and positive change in student behavior, a Safety Coordinator, six School Resource Officers for elementary schools, two Social Workers, seven Mental Health Counselors and a 504 Coordinator.
The district’s general fund operating budget provides funding for the day-to-day operations of the district such as paying salaries, insurance and utilities, and purchasing supplies, materials and services. This is not to be confused with the district’s capital budget which funds fixed assets such as facilities and equipment.
The budget, as it appears in this first reading, is merely a projection. The district has made preliminary projections for revenue based on historical data, the Senate version of the state budget, and preliminary local assessment projections from the county.
In the first reading of the budget, Lexington One administrators recommended a 2018–2019 $280,315,582 general fund budget — about a 6.7 percent increase (up $17,572,217) over Lexington One’s current operating budget for 2017–2018 of $262,743,365.
The projected $280,315,582 in proposed operating expenditures consists of about 87.4 percent salaries and related costs, 7.8 percent for programs and services, and 4.8 percent for utilities and maintenance.
It maintains the current student to teacher ratio formula per classroom on average and includes:
• 91.1 new staff positions to accommodate growth and provide greater support for our students with the greatest needs
-80.1 certified (includes 15.53 targeted for special needs students and 10 positions targeted for early childhood intervention), -8.5 support staff, and -2.5 administrative staff;
• a step increase for employees (about $3.4 million);
• health and retirement increases (about $3 million);
• a 2 percent salary increase for certified and support staff, and a 1 percent salary increase for administrative staff (about $3 million);
• funding to meet state and federal requirements;
• an increase in accounts payable to cover inflationary increases in utilities, supplies, materials, property and casualty insurance premiums, and services (about $1.6 million);
• an increase in the amount of money the district is paying for School Safety Officers in elementary schools;
• transfers of allowable costs to capital funds;
• the budgeting of $9 million from fund balance ($1.2 million more than last year); and
• a 4.45 mill increase (about $1.2 million) designated specifically for school safety initiatives.
The state allows districts to increase millage by the Act 388 formula (the percent of growth in school district population and the CPI). For 2018–2019, that formula would allow this district to increase millage by 14.27 mills. However, Lexington District One administrators are currently recommending a budget that includes only a 4.45 mill increase designated specifically for school safety initiatives.
Since Act 388’s implementation in fiscal year 2007–2008, operating millage is not added to owner-occupied homes but is added to businesses, automobiles, etc. With 4.45 mill increase, a Lexington One business owner with a business valued at $100,000 would see taxes increase about $27 ($100,000 X .06 percent assessment rate X additional mills). Each mill brings in about $274,878 in revenue to the district. Lexington One currently levies 317.95 mills for operations.
Lexington District One’s capital millage (85.3 mills) is only 12 more mills than it was in 2008 when taxpayers approved the last bond referendum. Each year, because of the one-cent sales tax generated by the Lexington County School District Property Tax Relief Act, a portion of taxpayers’ school bond taxes are also not paid by the taxpayer but paid instead by that one-cent sales tax.
In fact, a Lexington District One resident with an owner-occupied home valued at $100,000 pays about $123 a year total in school taxes of any kind (general fund and capital) on that home. Lexington One’s capital millage (78.3 mills) is only five more mills than it was in 2008 when taxpayers approved the last bond referendum. Each year, because of the one-cent sales tax generated by the Lexington County School District Property Tax Relief Act, a portion of that 78.3 mills for school bonds taxes is offset by a tax credit meaning that no Lexington District One taxpayer pays the entire 78.3 mills, no matter what type of property tax.
Budget Overview Many things impact a school district’s general fund budget each year — student growth, student-to-teacher ratios, tax collection rates, property tax relief, changes in other revenue from state and federal government, program needs and mandates such as increases in the cost of district employee health insurance, retirement or other benefits.
Growth Lexington District One is the largest school district in Lexington County — geographically and in student enrollment. The district is 360 square miles (much still undeveloped) while Lexington County is 701 square miles.
The district remains one of the state’s fastest growing school districts — growing 5,052 5K–Grade 12 students over the last 10 years. The district currently serves more than 25,600 students from prekindergarten through grade 12 and continues to see significant growth in new homes along with a corresponding influx of new students.
The district’s 5K–Grade 12 average daily membership grew from 24,895 on the 135th day of the 2016–2017 school year to 25,510, an increase of 615 students (2.5%) on the 135th day of this school year (2017–2018).
Currently, the district serves 26,202 students from Prekindergarten through Grade 12, and administrators project a growth of 635 students (2.5%) for the upcoming 2018–2019 year.
Revenue South Carolina’s main funding mechanism for schools is the “Base Student Cost,” part of the Education Finance Act (EFA) approved in 1977. This legislation was intended to provide each student with instruction that is appropriate for their level (primary, elementary, secondary, disability status).
Districts continue to be funded by the state at lower levels than the S.C. Revenue and Fiscal Affairs Office’s formula recommends. According to the S.C. Revenue and Fiscal Affairs Office, the Base Student Cost in 2017–2018 should be $2,984. Instead, in this academic year (2017–2018), the BSC was budgeted at $2,425, which is below the S.C. Revenue and Fiscal Affairs Office’s 2007–2008 school year formula ($2,476). In fact, the BSC was capped at $2,415 during the year because the state under projected the number of students for the 2017–2018 school year. Had the 2017–2018 Base Student Cost been funded at the S.C. Revenue and Fiscal Affairs Office’s recommended $2,984 per pupil, Lexington District One would have received an additional $15 million in funding.
In the proposals put forth by the legislature so far for Fiscal Year 2019, the Senate version of the proposed budget includes a Base Student Cost of $2,485 per pupil, an increase of $70 per pupil over this year’s BSC of $2,415 per pupil. This is still, however, under the S.C. Revenue and Fiscal Affairs Office’s recommendation of $3,018 per pupil for Fiscal Year 2019. If fully funded for 2018–2019, the district would receive an additional $15 million.
The proposed 2018–2019 General Fund budget is short about $4.9 million the district needs to cover the costs of state and federal mandates.
The Remaining Budget Schedule The second reading of Lexington County School District One’s 2018–2019 general fund operating budget takes place on May 15, 2018, at the regular monthly board meeting.
On June 26, 2018, the board holds a public hearing before the regular monthly board meeting and hears the third reading of the 2018–2019 general fund operating budget during the regular monthly board meeting.