- Associated Press - Wednesday, March 4, 2015

COLUMBIA, S.C. (AP) - Proponents of a plan to revamp education funding in South Carolina said Wednesday it cuts taxes while providing more money for poor, rural school districts.

Rep. Jenny Horne, R-Summerville, said her proposal simplifies what the state Supreme Court calls an outdated, piecemeal funding scheme that results in learning “ghettos” across the state. Its estimated $940 million price tag breaks down to $600 in tax relief on local property taxes and an additional $340 million for public schools.

“This bill revolutionizes education funding,” Horne said.

The plan is paid for by removing many of the state’s more than $3 billion in sales tax exemptions, including exemptions on medicine, postage, and hearing aids. That is bound to bring opposition. Horne said some exemptions may be worth keeping.

The plan, backed by school boards’ and district administrators’ associations, creates a new, statewide property tax. That uniform millage would roll back local property taxes on businesses, vehicles and rental property, while allowing rural districts with little tax base to benefit from industry elsewhere.

Proponents also call the plan an economic development tool. Currently, tax rates vary widely across the state, with the poorest counties having the highest rates. Their collective property is worth less, so rates are high for those that do pay. Lowering their rates through a statewide tax could help bring businesses to those areas, Horne said.

Horne acknowledges a single, statewide rate results in winners and losers. But her plan calls for “holding harmless” districts - believed to be three - that would otherwise lose money.

Distribution would be simplified, with districts receiving money based on their student population. But the calculations would still provide more for certain students, such as for poor, gifted, and special needs.

The consolidation of funding streams would give districts spending flexibility, as money would no longer be distributed through certain education programs.

“We’re funding pupils, not programs,” Horne said.

Similar plans filed since 2012 have gone nowhere.

Horne reintroduced it last month as a way to answer last fall’s state Supreme Court ruling that the state’s broken education system denies opportunities to students in poor, rural districts. The justices ordered lawmakers and district officials to collectively fix the system but provided no instructions for doing so.

The idea of removing sales tax exemptions faces a steep hurdle.

The plan actually calls for eliminating $2 billion in sales tax exemptions and putting half of that in a separate account for road and bridge work. But coming anywhere close to that seems unlikely.

In 2012, a House GOP study panel proposed eliminating $220 million worth of exemptions, after declining to touch the rest. That figure shrunk to less than $11 million as the bill passed the House. The Senate did nothing with it.

Horne believes the effort stands a better chance due to the court ruling.

A 17-member panel created by House Speaker Jay Lucas to come up with educating reform proposals began meeting last month. Its report is not due until January, so action is highly unlikely this year. Horne’s proposal is expected to be among those considered.



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