Lexington-Richland 5 staff present budget choices as state aid shifts after Act 388

The Lexington‑Richland School District Five board’s budget workshop on April 7 centered on state revenue shifts under the new funding formula and the district’s options for teacher pay, class sizes and fund-balance policy.

District officials told trustees the district expects roughly $4 million in additional state revenue under House Ways and Means projections but noted much of that is tied to state formulas and state employees’ costs. “The House Ways and Means has an increase of 731,000 for retiree insurance based on our payroll,” Lexington‑Richland 5 Chief Financial Officer Heather Tucker said, and “we see additional 1,900,000 in our state aid to classroom” tied to the 45‑day enrollment count.

Why it matters: trustees were asked to give a starting direction for the district’s operating budget as the General Assembly finalizes the state budget. The district said the state share of revenue and local share have shifted since Act 388 and that any material increases beyond the projected state dollars would likely need to come from local revenue or by drawing down reserves.

What officials presented - State revenue: Tucker walked through the state formula, saying the district’s index of taxpaying ability places it high among South Carolina districts and that growth in local enrollment does not automatically produce equivalent state funding. She summarized House Ways and Means projections that provide roughly $4 million more in state aid to classrooms next year but cautioned that parts of that amount are earmarked for specific cost drivers (retiree insurance, health insurance, bus‑driver raises) rather than general teacher salary increases.

- Teacher pay scenarios: Tucker and Superintendent Dr. Ross presented options. The state proposal would add $1,500 per cell in the teacher pay scale (about a 2% average increase), which the district estimates would cost roughly $4.7 million including fringe. Moving the district’s teacher minimum to $50,000 or $51,000 would raise those totals — she estimated roughly $7.3 million for a $50,000 starting salary (salary plus fringe). “The $1,500 would be 2%,” Tucker said, “an average of a 2% increase for all of our cells.” Ross said teacher pay raises have been the top priority expressed by parents, teachers and students.

- Class size and staffing: Reducing elementary/secondary class size to 20/23 would add about 16 teachers and cost roughly $1.2 million in salary and fringe, Tucker said. Increasing classified staff pay 2% would add roughly $4.5 million.

- Legislative impacts: Trustees were warned about potential fiscal impact from Senate Bill 78 (crediting industry experience toward teacher placement), which Tucker said will affect many teachers and “will have a major impact” on payroll beginning next school year once the State Department of Education updates certificates.

- Local revenue and fund balance: Tucker reviewed how Act 388 changed which property percentages are taxed for operations and debt service and that reassessments in Lexington and Richland counties affect rollback calculations. She said the district’s unassigned fund balance audited at year end was about $53 million and that board policy currently targets a fund balance between 15–18% of general fund expenditures. “That unassigned fund balance is truly just what is our options for the uncertainty,” Tucker said, noting uncertainty from federal grant expirations, legislative changes and enrollment swings that may be adjusted on the fifth day of school.

Board discussion and direction requested Trustees discussed tradeoffs between raising local revenue (millage), drawing on reserves and cutting or refocusing district spending. Board member Miss Huddle urged the district to also look for potential savings and administrative efficiencies before asking taxpayers for more. Trustee Jason Scully argued the district must be competitive on pay to retain and recruit teachers and said he supported beginning budget planning at the $51,000 starting salary scenario; Dr. Ross recommended $50,000 as a feasible starting point that “still outpace[s] everybody at midpoint.”

Several trustees raised staffing and program questions — substitute pay competitiveness, long‑term substitute rules, and whether some programs begun with one‑time federal ESSER funds have become permanent. Tucker said a competitive substitute program would require about $300,000 to fully match neighboring districts.

What the board asked administrators to do Trustees asked administrators to return with budget scenarios based on starting‑salary choices (49k, 50k, 51k), estimates of local revenue available under potential millage rates and a list of potential reductions (items funded with one‑time ESSER or other temporary sources) the board could consider. Tucker and Ross said they would update revenue projections as the senate budget process and conference committee proceed and would provide rollback and reassessment numbers once county data finalize.

Ending Superintendent Dr. Ross said the administration will present a formal budget for the board’s first May meeting. He reiterated the district goal to prioritize students while managing fiscal uncertainty and legislative changes that could change payroll obligations.