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Current Budget

Financial Facts for Lexington County School District One

Lexington One maintains a strong financial position. The district’s bond ratings, confirmed in September 2013, are Aa1 and AA- by Moody’s and Standard & Poor’s ratings services.

The district has received the Government Finance Officers Association’s Certificate of Achievement for Excellence in Financial Reporting for 18 consecutive years, the Association of School Business Officials, International’s Certificate of Excellence in Financial Reporting for 19 consecutive years, and a clear audit report with no management letter for 24 consecutive years.

A good steward of taxpayers’ dollars, the district spends 86 percent of its general fund operating budget on instruction and instructional support (salaries and related costs), 2 percent for program and district management, and 12 percent for operations (utilities, maintenance). The district’s money goes to instruction — with only 2 percent spent on district leadership and 5 percent on school leadership.

Because we are funded by taxpayer dollars, our budget for the 2016–2017 fiscal year is available for Lexington County residents to see the full breakdown of our expenditures.


2016–2017 Budget Breakdown

Lexington County School District One administrators approved the district’s 2016–2017 general fund operating budget at the June 28, 2016 Board Meeting.

The 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 Lexington County School District One Board of Trustees approved the district’s 2016–2017 general fund operating budget at the monthly board meeting that followed the public hearing.

There were no changes from second to third reading, and Lexington One administrators recommended a $244,815,426 general fund budget — about a 6.48 percent increase over Lexington One’s current operating budget for 2015–2016 of $229,924,087.

The $244,815,426 in operating expenditures consists of about 87.5 percent salaries and related costs, 6.9 percent for programs and services, and 5.6 percent for utilities and maintenance.

During third reading, Lexington One administrators recapped the recommended increase of $13,123,352 in employee salaries and related costs (6.5% increase) and an increase of $1,767,987 in programs and services (6.1% increase).

The 2016–2017 general fund budget:

  • maintains the current student to teacher ratio formula per classroom on average; 
  • includes 54.9 new staff positions to accommodate growth (35.9 certified, 16.0 support staff, 3.0 administrators); 
  • includes a step increase for most employees (about $2.9 million); 
  • includes a 2% salary increase for all employees (about $3.5 million); 
  • includes health and retirement increases (about $1.8 million); 
  • includes funding to meet state and federal requirements; incorporates an increase in accounts payable to cover inflationary increases in utilities, supplies, materials, property and casualty insurance premiums, and services (about $1.8 million); 
  • includes an increase in the amount of money the district is paying for Lexington County School Resource Officers by taking it to a 75/25 split from the current 50/50 formula; 
  • transfers allowable costs to capital funds; 
  • budgets $7.3 million from fund balance ($256,709 more than last year) and 
  • includes an 7.92 mill increase (about $2 million).

The state allows districts to increase millage by the Act 388 formula (the percent of growth in school district population and the South CPI). For 2016–2017, that formula allows the district to increase millage by 7.92 mills. Since Act 388, millage is not added to owner-occupied homes but is added to businesses, automobiles, etc., with a 7.92 mill increase, a Lexington One business owner with a business valued at $100,000 would see taxes increase about $48 ($100,000 X .06 percent assessment rate X additional mills). Each mill brings in about $250,415 in revenue to the district. Lexington One currently levies 298.07 mills for operations.

Lexington One’s capital millage (71.3 mills) is the same as 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 71.3 mills for school bonds taxes is offset by a tax credit meaning that no Lexington One taxpayers pay the entire 71.3 mills, no matter what type of property tax. 

In fact, a Lexington One resident with an owner-occupied home valued at $100,000 pays about $90 a year total in school taxes of any kind (general fund and capital) on that home.

To see the budget presentation, go here.


Factors in Determining the Budget

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, mandates such as increases in the cost of the district employee health insurance, retirement or other benefits. Here are some of the most significant things affecting this budget. 

Growth

Lexington 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. 

Lexington One also remains one of the state’s fastest growing school districts - growing 5,329 students over the last 10 years. The district currently serves about 25,000 students from prekindergarten through grade 12 and continues to see significant growth in new homes and an influx of new students. 

However, fast growing districts continue to be penalized by the current Act 388 funding formula because the formula used to distribute funding is based on the Consumer Prices Index and the state’s population growth. In addition, that formula does not take into account the amount of tax money that otherwise would have been taken in from owner-occupied housing that the district would have received before Act 388, which is normally the fastest growing tax base in the Lexington One area. Districts with stagnant or declining growth, on the other hand, receive more funding per pupil because they are still receiving part of the growth money built into the state’s formula even though they are seeing no growth. 

The district’s 5K-G 12 average daily membership grew from 23,953 on the 135th day of the 2014-2015 school year to 24,420, an increase of 467 students (1.9%) on the 135th day of this school year (2015-2016). Administrators project a growth of 493 students (2.0%) for the upcoming 2016-2017 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 was appropriate for their level (primary, elementary, secondary, disability status). 

Districts continue to be funded by the state at lower levels than the Budget and Control Board’s formula recommends. According to the Budget and Control Board, the Base Student Cost in 2015–2016 should be $2,801. Instead, it was budgeted at $2,220 and then adjusted mid-year to $2,172, which is below the Budget and Control Board’s 2005–2006 school year formula ($2,290). Had it been funded at the $2,801 per pupil it would mean another $16 million to Lexington One. 

In the proposals put forth by the legislature so far for Fiscal Year 2017, the Base Student Cost is projected to be $2,350 per pupil, an increase of $178 per student over this year’s BSC of $2,172 per pupil. This is still, however, under the Budget and Control Board’s recommendation of $2,933 per pupil for Fiscal Year 2017. This under funding creates a shortfall for Lexington County School District One of $15.4 for Fiscal Year 2016-2017.