The Cherokee County School District might have good timing with its decision last November to use investment financing for a new $33.3 million school building program.

As the district prepares to issue bonds in mid-March, a movement is already afoot among some state lawmakers to close a loophole that school districts have used recently to borrow money for school building programs without voter approval. The method involves issuing bonds and then repaying them through an installment purchase plan similar to a home mortgage.

In November, Cherokee County became the eighth school district to use this alternative financing plan to fund a new building program. The district plans to issue bonds this spring for use in building ninth grade additions at Blacksburg High and Gaffney High, a Gaffney High football stadium, Limestone Learning Center, a Blacksburg High stadium upgrade and new field house, and a 6-classroom addition at Goucher Elementary.

The bond issue will allow the district to bid and begin construction on these school building projects all at once. The financing method of borrowing from the district’s debt capacity is controversial because it depends on future tax revenue growth which might not happen.

State Reps. Jim Merrill (RDaniel Island) and Shirley Hinson (R-Goose Creek) plan to introduce a bill that would prevent districts from using alternative financing methods such as investment financing to fund school building programs without approval from taxpayers.

State lawmakers will likely discuss school building program financing as part of the larger issue of property tax relief when the legislative session begins Tuesday, Sen. Majority Leader Harvey Peeler (R-Gaffney) said.

“The property tax debate will have to include school funding and how independently school districts operate,” Peeler said.

State lawmakers will debate a proposed 2-cent sales tax increase to help cover the costs of eliminating all or some property taxes paid by homeowners.

If approved, this would raise the state’s sales tax to 7 cents on the dollar. It would be 8 cents in Cherokee County because of a local 1-cent option sales tax approved by voters in 1994 to fund a $47 million school building program bond issue.

Any property tax reform approved by state lawmakers will likely come with revenue restrictions for school districts and other local governments.

“With a 2-cent sales tax increase, there would be some type of funding cap on local governments,” Cherokee County Legislative Delegation Chairman DeWitt McCraw predicted.