As The Sentinel previously reported, some local officials, including a state senator, have expressed the opinion that the school district may be eligible for reimbursement of installment-purchase payments already made on its $365 million building program – based on a recent state Supreme Court ruling.
In the 3-2 July ruling, the state justices said installment purchase payments fall under operating expenses, which are covered by the state sale tax, not county property taxes.
The ruling came as a result of a lawsuit filed by six other school districts, but the School District of Pickens County was not involved in the suit and has not filed suit in an effort to claim the funds.
But Sen. Larry Martin, R-Pickens, said that while he felt the ruling incorrectly interpreted the Legislature’s intent, he felt that its wording may mean the Pickens school district, as well as others using the installment-purchase plan, may be eligible for reimbursement of those payments, even though they were not part of the lawsuit filed.
In August, a bond attorney for the school district disagreed and advised the board, that, in her opinion, the district was not eligible for a refund.
But Monday, the board gave administration the go ahead to look further into the possibility.
Superintendent Henry Hunt said it is still questionable whether or not the district would be eligible for the funds, but they plan to get advice from an attorney on how to apply for the funds through the S.C. Department of Revenue, he said.
“We may submit an application,” he said. “In the interest of the taxpayers of Pickens County, we need to find the appropriate answer, and if we go through the process, we want to make sure we do it correctly.”
He said no law suit has been filed and that at Monday night’s meeting, the board only “voted to have us proceed with investigating into making an application.”
“We’re talking with an attorney familiar with the legislation and the court case and getting his advice,” he said.
Board chairman Jim Shelton said Monday’s action was just a “baby step” in the process.
“We think we may be eligible for some funding through the ruling and are going through the necessary steps,” he said. “If we do nothing, we’re guaranteed to get nothing.”
Shelton said that while Franny Heizer of McNair Law Firm said the school district did not qualify for the funds, others dispute that opinion.
And while the question of whether or not the school district is eligible for reimbursement, the amount they could possibly receive is also up in the air.
Shelton said it could be anywhere from nothing to about $48 million, the amount the district has paid over the last three years for installment-purchase payments.
Those payments were between $15 million and $16 million each time.
“If I understood correctly, it could go back to when we started the installment-purchase plan,” Shelton said.
But Hunt noted that the amount, if any, “was up to interpretation.”
Both he and Shelton said if the school district were to receive any funds as a result of the ruling, the board would have to decide what would be done with those funds.
“Right now, we can’t spend funds we don’t have,” Shelton said.
Another board member says he thinks it is likely the state will owe the money to the school district, but he also said the funds should be returned to the taxpayers.
“If the state refunds the money to Pickens County, then the school district needs to then return that $50 million to the taxpayers,” said Alex Saitta, who represents the Pickens area.
“There is no reason to charge the taxpayers and the state for the same 2007, 2008 and 2009 installment purchase payments,” he said.
“The fear I have is the school board majority will find a way to get the state money and keep the money the taxpayers have already paid toward this and spend it all,” Saitta said. “I’ll vote against that and continue to speak out against that.”
Saitta said that when Heizer advised the school board that the district was not eligible for the funds, he wrote to Hunt and Shelton, urging them to get a second opinion.
“And they did,” he said.