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School District Funding 101

School district funding at a state and national level is a complicated topic that is often heavily discussed during election years. This guide provides a clear look into the funding model used in South Carolina, alongside specific data for the Fort Mill School District, to help our community understand both our successes and our funding challenges.

Where Does the Funding Come From?

Federal School Funding

Federal funding is directly tied to specific grants and student demographic classifications. Because the Fort Mill School District does not have high poverty rates or other classifications identified by federal programs, our federal funding is highly restricted. Only .1% of our total General Funds operating budget comes from federal funds.

South Carolina School Funding & Act 388

In 2006, South Carolina drastically altered how school operations are funded by passing Act 388.

  • The Homeowner Misconception: A common misconception among homeowners is that their property taxes fund school operations. In reality, none of the property taxes paid on owner-occupied homes go toward school operational budgets.
  • Debt Service Only: The portion of school taxes homeowners see on their bills is strictly for debt service. These taxes are tied to voter-approved bonds that fund school construction costs and cannot legally be used for general operating expenses.
  • The Burden on Local Businesses: Under Act 388, school districts can only raise tax millage on local businesses, rental properties, and vehicles to cover rising operational costs. While positive for homeowners, this places a massive burden on local businesses, especially in rapidly growing, predominantly residential areas like Fort Mill. Operating costs are condensed onto a small pool of taxpayers rather than being spread evenly across the entire community.
  • Sales Tax & Funding Gaps: To offset the removal of owner-occupied property taxes, the state distributes revenues from an Act 388-mandated 1-cent sales tax increase. However, this Act 388 Reimbursement accounts for less than 10% of our district's operational budget. Had the state maintained its previous funding model, our district would be receiving an additional $78 million annually for operational costs.

The State Aid to Classrooms Formula

The state in 2022 implemented a new proportionate share funding model called State Aid to Classrooms.

  • This formula considers school enrollment data alongside weighted student factors to determine funding levels.
  • Districts like Fort Mill, which feature rapid student growth but lower numbers of the specific student types tied to state weightings, are negatively impacted by this formula.
  • Additionally, recent legislative initiatives to incorporate charter schools into this formula have created additional funding strain for traditional school districts.

Unfunded Mandates: The Shift to Local Taxpayers

Funding challenges are further amplified when the State Legislature enacts new mandates without fully funding them.

Example (Teacher Salary Increases):

Since 2020, the state legislature has increased the base teacher salary from $35,000 to $48,500 in 2026, with an additional increase to $50,500 for the 2026–2027 school year.

While the Fort Mill School District firmly supports raising teacher pay, the state does not provide new funds to cover these baseline increases for districts that already pay above these levels using local tax dollars. When the state celebrates a teacher pay raise, the financial burden to cover that raise is effectively pushed onto local taxpayers if the district sits above the baseline.

As a result of these year-over-year state decisions, Fort Mill has been forced to shift the majority of its operational funding onto local tax revenue.

  • Local Tax Revenue: Accounts for more than 60% of our total operating budget, including Tax Relief Reimbursement.
  • State Revenue: Accounts for only 39% of our total operating budget for “Aid to Classrooms” and other State categories.

Fiscal Year 2026–2027 State Aid Allocations vs. Teacher Pay Increase

The chart below illustrates how current proposed state pay raises leave substantial funding gaps across multiple South Carolina school districts, with Fort Mill facing a 73.2% unfunded mandate.

Chart illustrates funding gaps across SC schools with FM at 73.2% unfunded mandate.

Our Commitment & Per-Pupil Spending Breakdown

The Fort Mill School District is dedicated to providing a world-class education to all students while remaining excellent stewards of taxpayer funds. We actively work to limit tax increases wherever possible and intentionally focus our spending directly inside the classroom.

Using the most recent state data available, the following chart breaks down how Fort Mill's total per-pupil spending is allocated:

Fort Mill School District Spending Per Pupil By Category

Depicts where per-pupil dollars actually go. Breakdown below.

Spending Allocation Breakdown

  • Instruction (58.1% / $7,830): Teachers who have direct contact with students every day.
  • Instructional Support (13.8% / $1,853): Classroom aides who support instruction.
  • Operations (20.7% / $2,783): Utilities, insurance, and physical costs required to maintain facilities.
  • School Management (5.7% / $768): Building-level administration, such as principals and assistant principals.
  • Programs Management (1.2% / $162): Costs related to overseeing specific student programming including Curriculum and Special Services.
  • District Management (0.5% / $74): District-wide leadership, including the School Board, the Superintendent, Assistant Superintendents, and Legal.

Key Takeaway: More than 72% of every dollar spent per pupil goes directly into instruction and instructional support for the classroom.

How Fort Mill Compares Regionally and State-Wide

The districts utilized in the comparison charts below were selected because they closely match the high educational outcomes, overall demographics and/or fiscal responsibility of the Fort Mill School District.

Efficient Spending, Leading Results

This chart depicts how FMSD compares regionally and state-wide for spend per pupil.

 

  • Lowest Spending in York County: Fort Mill has the absolute lowest per-pupil spending level in York County, and sits near the middle of the spectrum statewide.
  • Academic Leader: We maintain this exceptional fiscal efficiency while continuing to rank as the leading academic school district in South Carolina.
  • Classroom First: When compared to regional peers, Fort Mill leads York County in the total percentage of funds dedicated to the classroom, while maintaining the lowest percentage of funding allocated to leadership and operational costs.
Chart depicts Instructional and Support spending per pupil. The breakdown is included below.

Our Ongoing Promise

Our first priority will always be education. Our staff remains committed to the learning, growth, and future success of every student in our community.

We recognize the financial pressures placed on our local business owners and taxpayers due to state-level funding formulas, and we will continue to fight to limit those impacts at the local level. We deeply thank our community for your unwavering partnership as it is the cornerstone of our students' success.