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September 17, 2010

Frequently Asked Questions About the One Penny Sales Tax

What is a sales tax?

A sales tax is a locally authorized tax that must be approved by county residents to fund well-defined capital projects for the school district. We estimate that the one penny sales tax will garner approximately $450 million dollars over the next six years. The Charleston County School Board sought to raise these funds to assess, design, renovate, build or rebuild school district facilities for students in the Charleston County School District.

What is the current tax rate in Charleston County?

The sales tax in Charleston County is currently at 7.5 %. The newly passed resolution provides for a 1-cent sales tax, above the 7.5% tax rate – to begin in March 2011.

What did the ballot question look like?

The ballot question read as: must a special one percent sales and use tax be imposed in Charleston County for not more than six years with the revenue of the tax used to pay, directly or indirectly, the cost of the following education capital improvement projects in Charleston County? This question was followed by a list of the projects to be supported by the 1 cent sales tax.  The voter was asked to mark “Yes” or No;” a “YES” vote supported the tax while a “NO” voted opposed the tax.

Why should we invest in the capital program if the district is furloughing teachers and administrators?

The capital program supports teachers by providing them with new technologies, refurbished classrooms, and school-wide centers of excellence.  It also helps the district recruit and retain high quality teachers.  In addition, the capital program is completely separate from—and has no bearing on—the state funding system that has reduced CCSD’s general operating fund (GOF) over the past few years. The reduction in the GOF forced the district to choose between massive layoffs or furloughing teachers for five days and administrators for ten. 

What is the difference between general operating funds and capital funds?

General operating funds are allocated for the day to day expenses of running the school system (salaries, supplies, utilities, and transportation). Capital funds pay for design and construction of new schools, expansion of existing schools, major renovations and some routine facility maintenance. General operating funds cannot be used to support capital projects and capital funds cannot be used to support general operating expenses.

What buildings were constructed in the previous plan and what is scheduled to be built in the new plan? 

For a complete list of facilities that will be built and/or renovated, please view the full List of Proposed Projects.

What if the 1 cent sales tax had not been approved?

The Charleston County School Board had committed to rebuilding four seismically affected schools in the downtown area, at a cost of approximately $150 million.  If the sales tax proposal had not been approved, the district could have levied a property tax of up to 11 mills for 8 years in order to raise the funds necessary to make these buildings safe for returning students. State law limits the debt capacity (ability to borrow) of school districts and other government entities to 8%.

Will the sales tax continue forever?

No. This referendum asked voters to approve a 6-year, 1 cent sales tax. The district would return to the voters to support any recommendation to extend the sales tax beyond 6 years. Indeed, if the sales tax raises more per year than currently anticipated, the district may end the tax early, once adequate funds for all listed projects have been collected.

If the local sales tax referendum passes, when will the projects start?

For certain projects on the list, we already have advanced designs for building renovation or construction. These projects can begin as early as June 2011. A timeline for all projects, aligned with expectations for tax collections, will be developed in the coming months.

Where can I get more information about the sales tax referendum?

For additional information about our 2010 – 2015 Capital Plan, call the Office of Communications at 937-6303 or visit the Charleston County School District website.

If you would like to ask Superintendent McGinley a question about the Capital Plan, please email her.

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