Sumter County Council will reject Sumter School District's 9.01 millage increase request on Tuesday, and no alternative offer will be passed either, according to sources.
Sumter school Board of Trustees Chairman the Rev. Ralph Canty discussed the issue with The Sumter Item on Friday, and county council Chairman Jim McCain confirmed the details.
The district's millage request translated to about $1.2 million and would have no impact on primary homeowners' property in the county because that is exempt under state law. The 9.01 mill request would impact all vehicle property tax rates starting in January and commercial property to include homeowners' second and additional homes they rent out as their non-primary residence.
According to district administration, the 9.01 mill request would have translated to a $55 tax increase on a $100,000 piece of commercial property and a $10.80 tax increase on a $20,000 vehicle.
Twice this month, some council members essentially requested district administration go back to the school board and consider reworking its request downward, in part because of a projected 2% increase in the county's tax base for next year. If those estimates hold true, it would mean an extra $840,000 going into the district's coffers already.
Take that off its official mill request, and the district needs less to balance its budget for next year, McCain and other council members said at a June 4 budget workshop with district administration and last week in a letter to the editor to The Sumter Item.
Initially, on June 10, the nine-member board voted unanimously to still ask for the nine-mill increase, the maximum it's allowed under state law, from council.
They chose to go for the full mill increase instead of two other lesser scenarios presented by district Chief Financial Officer Jennifer Miller. Miller also informed the trustees at the meeting that the county's growth rates the last two years have been 0.2% and 0.9%.
However, after McCain's recent letter to the editor, Canty called for a special meeting of the board for Friday night to potentially negotiate a lower compromise proposal to council.
Late Thursday, he said McCain had informed him earlier in the day that the full millage request would be rejected by the majority of council and also any alternative offer that was presented. Therefore, Canty canceled Friday's meeting of the trustees.
He said McCain had polled his council members last week to see where they stood on the issue.
Canty did credit the council chairman for trying to work diligently toward a compromise.
When contacted Friday, McCain said four of the seven council members were against any tax hike for the district, and he doesn't expect any changes on Tuesday.
"I played all the political capital that I could to try and get a compromise, but it just didn't work out," McCain said.
It will mark the third consecutive year that council has rejected a district millage increase request.
The first time was in 2017 after a financial crisis was discovered in the school district involving $6.2 million in overspending from fiscal year 2016 that drained the district's general fund balance to $106,449.
Under Interim Superintendent Debbie Hamm, the district has built its fund balance during the last two years back up to a projected $10.2 million for the end of this fiscal year, June 30. Under a new state law, the district is required to have one month's operating expenditures, projected currently at $10.5 million, in its fund balance by June 30, 2020.
A total of 25 of the 81 districts in the state, including Sumter, have no fiscal authority and must go before their respective county councils to approve a millage rate request.
What was proposed tax increase for?
District administration said the millage increase was necessary to partially offset the state-mandated 4% salary increase for teachers next year. That increase will cost the district about $4.8 million and the $1.2 million in additional local revenue was planned to help fund the local responsibility for that hike.
Miller has said to balance next year's budget the district has already made $4.9 million in cuts, largely in the area of personnel through attrition and moving employees around the district. Without the additional local revenue, Hamm and Miller have said more budget cuts will be necessary.
Another issue with council
In the June 4 budget workshop with district administration, council members also said they considered a millage adjustment back to a previous level from a few years ago - after a "swap" mechanism that allowed all primary homeowners a tax cut the last two years - to be a millage, or tax, "increase" on those homeowners now.
District administration and Canty interpret the debt service adjustment of about 10 mills to be "restoring" the millage level to what it was previously and not an increase.
McCain also mentioned this in his letter last week.
After the tax break the last two years, McCain said the 10-mill debt service increase will translate to an extra $40 in taxes for a homeowner on a home valued at $100,000, according to county finance officials.
So, the majority of council members see the district's request as a tax increase on both homeowners and business/industry, the letter said.
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