In a national study we issued in March 2021 on the harm of business incentives to school revenues, certain places stood out for their enormous tax abatements. A deeper analysis shows that the lost revenue falls disproportionately on low-income school districts, those with the most Black and Brown students, and those already suffering from regressive revenue systems.
While hundreds of millions of dollars are lost each year to incentives, 61 of the 81 public school districts in South Carolina remain underfunded. At an average salary of $50,395 in 2019, the $423 foregone revenue could have hired 8,394 teachers. Several poor districts could close their funding gap simply if the counties stopped abating schools' taxes.
For decades, the public had no meaningful way of knowing how much schools lost via government subsidies given to corporations as part of “economic development”. We could reasonably assume it was substantial: property taxes are the biggest source of public school funding, so giving corporations a pass on paying some or all of it inevitably hits schools the hardest.
Public school districts in South Carolina lost $423 million in property tax revenues during the 2019 fiscal year, due to tax abatements county governments granted to corporations. That’s an increase of $99 million – or 31 percent – compared to just two years earlier, according to a new Good Jobs First report released today: “The Revenue Impact of Corporate Tax Incentives on South Carolina Public Schools.”
Tax abatement disclosures often need to be enforced at the state level. We have isolated a few states that have abnormally low disclosure rates among their local governments. Is there underreporting going on? Is underreporting a statewide problem?