CHARLESTON, S.C. (WCSC) - As Dorchester District 2 prepares for students to return to schools later this month, leaders are still dealing with a budget deficit of about $600,000.
One of the biggest challenges they have faced with funding is Act 388, according to DD2’s Chief Financial Officer Allyson Duke.
It was passed 13 years ago, and school districts like DD2 have felt the effects ever since.
Duke said DD2 has missed out on about $85 million since the tax law was passed in 2006.
That’s money that could have gone to hiring and retaining more teachers.
District leaders are hoping Dorchester County Council can help with the immediate budget deficit, but they are ultimately looking to state lawmakers to address the funding issues they believe Act 388 has caused.
“Because Dorchester Two is so heavily residential, almost 50 percent of our tax base is residents, it has had a huge impact on our district,” Duke said.
It’s a common misconception that the taxes on your home go towards school operating expenses, but that money is actually credited back to homeowners because of Act 388.
The tax law was established just before the great recession, and supporters argue it saves homeowners from being taxed out of their homes.
“This law exempted owner-occupied homes from paying operating taxes for local schools, shifting that burden to commercial and other properties. In exchange, the state increased the state sales tax by a penny and agreed to send money back to school districts, theoretically, to make up for lost revenue,” according to DD2 leaders. “The major flaw in this method of funding school operations is the collected revenue from sales taxes are far less than funds from property taxes.”
DD2 leaders have urged community members to contact state legislators to advocate for revisions to or repeal of Act 388.