Public Hearing and
Third Reading of the 2014–2015 Budget
Lexington One board approves 2014–2015 general fund operating budget
Lexington County School District One administrators presented a third
reading of the district’s 2014–2015 general fund operating budget at a
public hearing held at 7 p.m. Tuesday, June
The Lexington County School District One Board of Trustees approved the
district’s 2014–2015 general fund operating budget at the board meeting that
followed the public hearing.
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.
From the second reading to the third reading, the proposed budget was
increased by $137,771 as Lexington One administrators added two new
positions and extra days for some Guidance staff to the budget.
The third reading of the budget included a recommended general fund
operating budget of $220,425,851 — about an 8.6 percent increase
($17,461,951) over Lexington One’s current operating budget for 2013–2014 of
$202,963,901. The projected $220,425,851 in proposed operating expenditures
consists of about 87 percent salaries and related costs, 7.5 percent for
programs and services, and 5.5 percent for utilities and maintenance.
The proposed budget shows an increase of about $15.6 million in employee
salaries and related costs (an 8.8% increase) and an increase of about $2
million in programs and services (a 7.0% increase).
It also adds 95.64 positions (to accommodate student growth across the
district and the opening of Deerfield Elementary); includes a step increase
(about $2.5 million) for all employees and a one percent salary increase
(about $1.6 million) for all employees; transfers allowable costs to capital
funds; budgets an additional $1 million from fund balance over last year ($9
million total) and includes a millage increase.
Act 388 provides a formula for districts to use to increase millage (the
percent of growth in school district population and the CPI). For 2014–2015,
that formula would allow Lexington One to increase millage by 9.71 mills.
However, the district will add 6.75 mills (not the 9.71 mills it could have
added) to fund the budget.
Act 388 millage is not added to owner-occupied homes but is added to
businesses, automobiles, etc. With a 6.75 mill increase, a resident with a
business valued at $100,000 would see taxes increase about $40.5 ($100,000 X
.006 percent assessment rate X additional mills). Each mill brings in about
$232,067 in revenue to the district. The district currently levies 271.46
mills for operations.
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 like 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.
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.
The district had an average daily membership of 23,364 students (not
including 3- and 4-year-olds) on the 135th day of this school year
(2013–2014). This is an increase of 429 students (1.9%) over the 2012–2013
school year’s 22,935 average daily membership.
Lexington One remains one of the state’s fastest growing school districts
growing 5,135 students over the last 10 years (from 18,229 ADM in
2003–2004).) Administrators project a student growth of 573 students for the
2014–2015 school year. The district ranks ninth in the state in enrollment.
The district has made preliminary projections for revenue based on
historical data, the House and Senate version of the state budget, and
preliminary local assessment projections from the county.
Districts continue to be funded by the state at lower levels than the Budget
and Control Board’s formula recommends. South Carolina’s main funding
mechanism for schools is the “Base Student Cost.” The $2,120 Base Student
Cost recommended by the legislature this year is no exception. According to
the Budget and Control Board, the Base Student Cost in 2014–2015 should be
$2,742. Instead, it is below the Budget and Control Board’s 2005–2006 school
year formula ($2,290).
In addition, the district anticipates once again losing the “hold harmless”
funding (designed to ensure that no district lost money due to the changes
in the calculation of the Index of Taxpaying Ability). This year the
district lost $2.3 million in funding due to the loss of the hold harmless
money and anticipates losing the same amount again next year.
As previously mentioned, millage is no longer added to owner-occupied homes
but is added to businesses, automobiles, etc. Lexington County School
District One’s tax base is made up of about half owner-occupied and half
business tax assessments and other taxable assessments. Overall business
assessments are not increasing as much as they could due to the county’s
fee-inlieu of taxes agreements with some of the county’s largest
corporations. The district does not participate in those negotiations.
Neither is the district provided detailed information regarding those
agreements. As a result, the district’s taxes derived from fee-in-lieu of
agreements are budgeted based on historical data.
The 2007 industrial park tax distribution arrangement designed to help
offset the cost to districts of the impact on student growth caused by new
businesses moving to the county is a positive step. Although the district
has not yet seen any revenue from industrial park development in the county,
future revenue is predicted.
Each year the state provides school districts with money in an attempt to
reduce the impact created by property tax relief (Act 388). When first
implemented, property tax relief funds replaced dollar for dollar the taxes
levied for school operations on an owner-occupied home valued up to
$100,000. Beginning in 2009, property tax relief money was distributed on a
per capita basis rather than on a basis that takes into account the actual
taxes lost by the county. Last year, the 2013 fiscal year, the district
received almost $18 million less from the state than it would have received
before Act 388 for the growth in homes.
Lexington One’s 2013–2014 general fund operating budget was $202,963,901.
Board Policy DB Annual Budget requires the district to maintain no less than
seven percent of its total general fund budget as a fund balance from one
fiscal year to the next. However, the district usually reserves 10 percent,
slightly more than one month of operating expenses.
06-18-2014 Public Notice
06-24-2014 Meeting Agenda
Chief Financial Officer John Butler’s Presentation
Lexington One board approves 2014–2015 general fund operating budget
Approved fees for 2014–2015