South Carolina

The FY 2013–2014 South Carolina State Budget Bill was ratified on June 19, 2013. This report will primarily include information from the FY 2013–2014 Appropriations Act.

State Issues Affecting P–12 Education Funding

• • Financing public education in South Carolina was a prominent theme in Governor Haley’s State of the State address. In her speech to the legislature, Governor Haley stressed the need to improve the quality of education in disadvantaged regions of the state while maintaining performance in wealthier areas. She stated that “we [South Carolina] do have to figure out a better way to bring up the schools in the poorer parts of our state, and history shows that we cannot count on their own depressed local tax bases and restrictive federal dollars to do it.” Toward that end, the governor has convened a bipartisan group of lawmakers to discuss proposals to change the funding program in the state. No significant changes were made to the state’s funding program in the FY 2013–2014 Appropriation Act.

• • South Carolina is still dealing with the unintended budget consequences of Act 388. The legislation was passed in 2006, exempting owner-occupied residential properties from school operating taxes and compensating for the lost revenue with an additional 1% increase in the state sales tax. To date, the policy has affected school districts unevenly; a disproportionate number of poorer school districts have experienced decreases in combined local and state funding per pupil.

Funding Priorities/Trends for P–12 Education

Charter Schools

• • Funding for the Public Charter School District was increased by $12,130,000 from $30,343,146 in FY 2012–2013 to $42,473,146 in FY 2013–2014. This amount is substantially more than Governor Haley’s proposed $5 million increase. State Superintendent Zais did not request additional funding for charter schools; however, he was adamant that a permanent solution to funding education will require all dollars associated with a student to follow them to their public schools of choice.

Transportation

• • Governor Haley proposed to privatize funding for student transportation by June 2017. Individual districts would then be able to decide to operate fleets themselves or with a consortium of neighboring districts.

• • State Superintendent Zais remained unopposed to efforts to decentralize transportation services. However, for FY 2013–14, Zais requested $11.85 million for fuel and maintenance as well as $34 million in capital reserve funds to replace buses that were purchased in the 1980s.

Special Education

• • Due to a failure on the part of the state to meet required maintenance of effort spending for special education for three consecutive fiscal years, the state of South Carolina was notified that it would face a $111 million cut in federal aid for special education. In order to avoid this, the State Department of Education released $75 million to school districts in FY 2010–2011. The FY 2013–2014 Appropriation Act includes $37,736,600 to meet the required maintenance of effort spending. The state superintendent and Governor Haley supported the funding.

Changes to the Funding Formula for P–12 Education

Education Finance Act

• • The General Assembly passed legislation that will increase the base student cost to $2,101. However, this amount is considerably less than the recommended figure of $2,790. Governor Haley and State Superintendent Zais recommended that the FY 2012–2013 base student cost of $2,012 be maintained, at a minimum, for FY 2013–2014.

• • Five years after Act 388 was passed, it continues to affect school districts’ capacities to provide students with adequate educational resources. In particular, a disproportionate number of poorer school districts have experienced decreases in combined local and state funding per pupil.

• • Over the next three years, the South Carolina Budget and Control Board is forecasting substantial increases to the state general fund. The economic forecasters are anticipating yearly increases to the base student cost as a result of the additional revenue.