If local voters pass a November referendum requesting a penny tax increase, homeowners and business owners will see about a one-third reduction in their property taxes.

The estimated $282 million revenue anticipated over 10 years from the tax increase will then enable the Beaufort County School District to carry out much-needed improvements, maintenance tasks and new construction.

On May 31, the county’s board of education approved placing the Educational Capital Improvement Sales and Use Tax referendum on the November 2016 general election ballot.

According to the district’s press release following the vote, “If approved, the one-penny sales tax would generate revenue to fund the district’s capital needs for the next 10 years and also share the responsibility for generating those funds among property owners, renters, businesses and tourists.”

The district routinely pays back interest and principal on bonds taken out in order to work on the school facilities. Residents pay toward that through their property taxes, or debt service.

“As debt service, you pay a tax, a millage rate. The debt service millage rate and revenue we receive is restricted to pay down the principal and interest on the bond we make to pay for capital improvements,” said Phyllis White, the district chief operational services officer. “Debt service basically is a mortgage payment. We borrow money by taking out a bond to build buildings and make improvements and that’s the mortgage.”

School officials anticipate a revenue of $282 million by adding a penny per dollar to the taxes already collected on such items as paper products, soap, pet food, alcoholic beverages, ready-to-drink beverages, ready-to-eat hot foods and more.

Who will pay that extra penny?

Not just Beaufort County residents, said White, who has monitored and examined every detail of the system’s finances for the past several years.

“Anybody who comes into the county. You stop and buy something, you’ve just contributed to our mortgage payment,” White said.

That’s a lot of people, especially considering that approximately 2.5 million people visit Hilton Head Island annually, according to the Hilton Head Island-Bluffton Chamber of Commerce Fast Facts.

But wait, there’s more.

“What we found during our research is that about 8,000 people come from other counties to work in our county,” said White, “so there are also commuters helping pay for our mortgage payment.”

Why ask for a penny tax referendum in the first place?

Growth.

School officials say the county population of 156,070 in 2010 is expected to increase to about 185,220 in 2020, according to the “Community Profile” published by the S.C. Department of Employment and Workforce dated April 15.

“And they won’t all be adults,” said Jim Foster, district director of communications. “Our projections have been remarkably accurate in the recent past and in the next 10 years we are expecting 3,000 additional kids. The big picture is we are extending the life of the facilities we have and building new facilities for the kids we know are coming. And there’s nothing fancy about what is planned. We are upgrading big ticket items – roofing, HVAC, waterproofing exterior walls.”

Included among the many line items are the purchase of land and construction for two new Bluffton schools (grade level undetermined at this time); a new wing for the not yet completed May River High School; HVAC upgrades for 12 schools; roof replacements for 12 schools; addition of a gym and auditorium for Whale Branch; additions to River Ridge, Hilton Head middle and high schools; wrestling rooms for Bluffton and Beaufort high schools; and concessions and parking for River Ridge.

The grand total for the projects is $217,108,523 – well below the anticipated $282 million revenue expected from the penny tax.

Gwyneth J. Saunders is a veteran journalist and freelance writer living in Bluffton.