Did Sumter County School District Two need county council approval for its 2003 budget?

Plain-English summary

Sumter County School District Two asked three finance questions in 2003. On budget approval, the Attorney General agreed that no current legislation appeared to require Sumter County Council's approval, although seeking it had been the longstanding practice. The opinion did not say that custom itself imposed a legal duty.

The district also asked whether a decline in its general fund balance triggered a constitutional requirement to levy for a prior-year deficiency. Based on the information supplied, the AG said the district still had enough funds at year end to meet expenditures. The lower balance was not, by itself, the deficiency addressed by Article X, § 7. The office said beginning funds apparently should be counted when assessing whether a deficiency existed.

The AG declined to decide whether the district was entitled to a proportional share of penalties on delinquent taxes and related interest. It found no controlling South Carolina authority specific to that question and pointed to declaratory judgment or legislative clarification.

Currency note

This opinion was issued in 2003. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Was county council approval legally required for this school budget? A: The AG found no current legislation requiring it for Sumter District Two in 2003, despite the district's practice of seeking approval.

Q: Did a smaller fund balance automatically mean a constitutional deficit? A: No. On the supplied facts, the district had funds to meet its expenditures and the AG found no apparent deficiency under Article X, § 7.

Q: Did the AG decide who received delinquent-tax penalties and interest? A: No. It said that question was best resolved by declaratory judgment or legislative clarification.

Background and statutory framework

The opinion separated budget approval, an alleged prior-year deficiency, and a claim to tax penalties. It quoted the constitutional rule for a political subdivision whose ordinary expenses exceed income, then relied on the district's supplied financial facts for the second answer. It expressly left the third question open.

Citations and references

• Article X, § 7 of the South Carolina Constitution: the deficiency provision discussed in the opinion.
• Prior South Carolina AG opinions dated January 16, 1968, March 17, 1978, and November 6, 1985: cited for treatment of unallocated surplus funds.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/april-8-2003/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/03/03april8hirata.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
HENRY McMAsTER
ATfORNEY GENERAL

April8,2003

fl

~

William L. Hirata, Esquire
Parker Poe
Three Wachovia Center
401 South Tryon Street
Suite 3000
Charlotte, NC 28202
Dear Mr. Hirata:
J. Frank Baker, Superintendent, Sumter County School District Two, has requested opinions ofthis Office as to several issues pertaining to that District. At my request, as an attorney for the District, you have supplied your opinion as to those questions. I also requested the opinion of the Sumter County Attorney as to these questions, and he has provided his opinion to us. I appreciate the input of both you and the Sumter County Attorney, and I have carefully considered your opinions. The questions posed by Superintendent Baker are separately addressed below, some of which I have rephrased to relate to the scope of this response.

I.

Is the Board of Trustees of District Two required to obtain the approval ofits budget by the Sumter County Council?

I concur in your conclusion that District does not need to obtain the approval of its budget by the Sumter County Council for the reasons set forth in your letter. Although the long standing practice is for the District to obtain Council's approval, no current legislation appears to require such approval. 2.

Is the Council required to approve an allocation restoring the Districts general fund balance in order to comply with S.C. Const. art. X §7(b)

Article X §Tu provides that the" . .. whenever it shall happen that ordinary expenses of a political subdivision for any year shall exceed the income of such political subdivision, the governing body of such political subdivision shall provide for levying a tax in the ensuing year,

)

REMBFRT c. DENNIS BUilD!NG • POST OPPICE Box ll549 • COLUMBIA, S.C. 29211-1549 • TE1..EPHONE: 803 -734-3970 • FACSIMil.E: 803-253-6283

~./.k/51 1\lL>,,t.-.

William L. Hirata, Esquire
April 8, 2003
Page2
sufficient, with other sources of income, to pay the deficiency of the preceding year together with the estimated expenses for such ensuing year." According to the information that you and the Superintendent have provided, the District did not experience an actual deficit with insufficient funds on hand at the end of the year to meet expenditures. Instead, the District had a lower balance at the end of the 2001-2002 fiscal year than it had at the beginning of the year.

I

Prior opinions of this Office have concluded that surplus funds can be considered a revenue source when not allocated or appropriated. Ops. Atty. Gen. (January l 6, 1968, March 17, 1978 and November 6, 1985). In particular, the January 16, 1968 Opinion stated that, ifmonies were released from the General Fund Reserve, ". . . such surplus funds, if and when so re1eased, may properly be taken into account in computing whether current and continuing revenue measure are sufficient to make the [Appropriations] Act in balance." Accordingly, the funds at the beginning of the fiscal year apparently should be included in any detennination of whether a deficiency exists at year end. Under the circumstances that you have described, a deficiency does not appear to exist in the 20012002 funds of the District under the terms of art. X §7.

3.

Is the District entitled to a proportional share of penalties on delinquent taxes and interest earnings thereon? I have located no prior opinions on the above issue, and your proposed opinion identifies no

authority in South Carolina which is specific to this question other than general authority regarding interest. Because the answer to this question could affect a number of other counties and school districts, we believe that this question is best resolved by a declaratory judgment action or legislative clarification. If you have further questions, please let me know.