040617 Budgets: Higher taxes won't cover cost of raises for public employees
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Budgets: Higher taxes won't cover cost of raises for public employees

By Charles Swenson

The state law that limits the ability of local governments to raise property taxes means Georgetown County won’t be able to fully fund a new round of pay raises without making cuts in other areas, according to the county administrator.

The county school district faces the same issue. Even with a tax increase, it would only bring in about $506,000 for what the district finance director says is a $1.1 million cost of raising pay and benefits for district staff.

State law uses a formula based on population growth and the Consumer Price Index to determine how much local government can increase property taxes. In Georgetown County, that figure works out to be 1.51 percent.

County Administrator Sel Hemingway is also projecting property tax revenue will grow less than anticipated. “We’re probably approaching the halfway mark of recovery” in real estate sales and building activity from their low during the Great Recession of 2008 and 2009, he said. Public employee salaries were also cut or capped during those years, and the county and the school district have been trying to catch up with neighboring counties.

“That will be an issue to deal with,” Hemingway told County Council last week. In addition, the cost of state health insurance is set to increase and local government will face higher costs to cover shortfalls in the state pension system.

Fringe benefits now account for 43 percent of the cost of school district employees, Superintendent Randy Dozier said.

The average teacher costs the district $70,000 a year, he said. The number of teachers is based on enrollment, and the district expects a slight decline in the coming year. That will result in eight to 10 fewer teaching positions, according to Lisa Johnson, the district finance director.

One area where the county and the school district differ is in who pays for a tax increase. Owner-occupied homes are exempt from property taxes for school operations. The funds are made up by a portion of the state sales tax. There is no exemption for county operations.

“Constituents don’t understand they don’t pay tax increases,” School Board Member Pat DeLeone said. “Only second and third homeowners.”

Dozier said the district staff isn’t ready to say whether a tax increase will be needed. “We’re still working on it,” he said.

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