Horry County Schools does not have the money to pay for everything in its five-year building plan, but a tax increase could help the system complete more of the projects.
The district's five-year plan includes everything from new and replacement schools, renovations, maintenance and upkeep across all of the district facilities at a total cost of more than $754 million. The district will have to narrow down the list to something affordable.
The district has limited funds at the current tax rate of 10 mils. But the board is looking at how much money they could spend at both 12 mils and 14 mils. One mil is equal to about $4 per $100,000 value on a house, according to school district Chief Financial Officer John Gardner.
That means the current tax rate of 10 mils is equal to $40 per $100,000 assessed value.
For each tax rate, there are three funding methods to choose from.
In the "pay-as-we-go" method, the district pays for repairs as it receives the tax revenue without borrowing money.
This method is the most cost-effective, because none of the funds are used to pay interest on debt but would only give the district $600,000 to start on repairs during the 2018-19 fiscal year. The district would have $55.5 million in additional funding over the life of the penny sales tax through March 2024.
The second option is borrowing money without a referendum.
The district could borrow up to 8 percent of its bond capacity without asking voters.
This would give Horry County Schools $33.4 million in the 2018-19 fiscal year but would leave only $12.9 million for work over the life of the penny sales tax. This would give the district less money in total because of interest payments.
The final option is a bond referendum. The school board could ask voters to approve a $150 million bond referendum, which would give the district $130.5 million in the next fiscal year year and leave $12.7 million over the life of the penny sales tax in 2024. Under this option, the district would eventually have to raise taxes if the sales tax is not renewed in 2022.
But the amount of money the district has access to for each option increases with a tax increase.
At 14 mils — a tax increase of $16 per $100,000 assessed house value — the district could get $5.1 million in the next fiscal year with another $85.9 million through the life of the penny sales tax using the "pay as you go method."
At most, a bond referendum at a tax rate of 14 mils could give the district $293.4 million in the next fiscal year, with $4.4 million left throughout 2024. This option could also mean a tax increase of more than 3 mils if the sales tax is not renewed.
But school board Chair Joe DeFeo said a tax increase isn't in the works right now.
"We’ve got too much money in the bank to do a tax increase for that," DeFeo said. "I doubt very much there’s going to be a tax increase this year, and next year is very iffy. Nobody’s talking about it. And when it’s been recommended over and over again by staff, everybody’s said 'no.'"
Years ago, the district dropped the millage rate from 28 mils to 10 mils in conjunction with the penny sales tax, DeFeo said.
"We should have stopped at 14 mils," DeFeo said. "If we don’t have that penny sales tax, taxes are going to have to go up to 28 mils or higher. Whoever is in charge would have no choice."
Christian Boschult, 843-626-0218, @TSN_Christian