The Impact of Future Population
Growth on Berkeley County
School District Finances
and School Facilities
(2016-2035)
Robert T. Carey, Ph.D.
William Molnar, Ph.D.
Ellen W. Saltzman, M.A.
August 11, 2015
Model Overview
• Baseline population projections from SC Revenue &
Fiscal Affairs Office (RFA)
– Projections for Berkeley County for years 2013-2035
– RFA population data divided into 5-year cohorts
• Used proportions from REMI projections to separate out 15-17
year-old population (for high school) and 5-year-old population
(kindergarten)
• Otherwise stayed with given 5-year cohorts to maintain integrity
of RFA projections
Model Overview
• Models without Volvo:
– Performed baseline adjustment of REMI population
estimates
(i.e. replaced REMI population projections through 2035 with RFA projections)
– Used RFA projections and REMI actual residential & nonresidential capital stock estimates as basis for fiscal
projections
• Models incorporating Volvo
– Ran Volvo construction & operations through REMI model
– REMI projected changes from RFA population estimates
and generated new estimates for value of capital stock
Model Overview
• Primary modeling done with Regional Economic Models,
Inc. (REMI) PI+ model
– Input-output (IO) and computable general equilibrium (CGE)
model
– Used to model changes in regional economy from population
growth, particularly value of capital stock
– Also used to model changes resulting from Volvo construction
($500 million between Fall 2015 – end of 2017) and operations
(employing 2,000 workers beginning 2018 and 4,000 total
beginning 2023)
• Fiscal impact modeling carried out using our Fiscal
Impact Analysis Tool, using RFA and REMI projections as
inputs
• Historical BCSD financial data from CAFRs FY 2006-2014
RFA
Volvo
2035
2034
2033
2032
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
Thousands of People
Projected Total Population (All Ages)
Berkeley County, SC (2013-2035)
400
350
300
250
200
150
Projected Value of Capital Stock
Berkeley County, SC (2016-2035)
$35
$25
$20
$15
Residential (w/o Volvo)
Residential (Volvo)
Non-Residential (w/o Volvo)
Non-Residential (Volvo)
2035
2034
2033
2032
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
$10
2016
Billions of 2014 Dollars
$30
Fiscal Impact
Projections
BCSD Fiscal Impact Analysis
• Analyses run with and without Volvo
• REMI model
– Used to estimate changes to residential & non-residential
capital stock
– Used to adjust capital stock and population projections in
Volvo model
• Fiscal Impact Analysis Tool used REMI projections to
estimate BCSD general fund expenditure & revenue
streams (not including debt service)
BCSD Fiscal Impact Analysis
Methodology for Fiscal Projections
Revenues
Revenues from Local Sources
Ad Valorem Taxes
Revenue in Lieu of Taxes
Property Tax Recovery (FY2016)
All other revenue from local sources
Restricted State Funding
Bus Driver Salary
Employee Fringes (employer paid)
Other
Education Finance Act (EFA)
State Revenue in Lieu of Taxes:
Tier I
Tier II
Tier III
Other
Expenditures
Instruction
General Instruction:
Kindergarten
Primary
Elementary (Middle)
High School
Other Programs
Support Services
Interfund Transfers
Transfer to Debt Service Fund (expires after 2016)
Transfer from EIA (Teacher Salary Supplement)
Indexed to growth in residential & non-residential capital stock
Indexed to growth in non-residential capital stock
BCSD projection for 2016, then indexed to growth in residential & non-residential capital stock
Historical average value (fixed, grows at rate of inflation)
Fixed at 2014 value
Indexed to student-age population growth
Excluded from projections
Indexed to student-age population growth
Fixed (constant-dollar value declines at assumed rate of inflation)
Fixed (constant-dollar value declines at assumed rate of inflation)
2014 value, then indexed to state population growth
Historical average value (fixed, grows at rate of inflation)
Indexed to 5 year-old population growth
Indexed to 5-9 year-old population growth
Indexed to 10-14 year-old population growth
Indexed to 15-17 year-old population growth
Indexed to total student population growth
Indexed to total student population growth
Actual value, expires in 2016
Fixed at 2016 value (grows at rate of inflation)
BCSD Fiscal Impact Analysis
• Including millage “rollback” in revenues (millage = 149.2+12.3):
– RFA population projections alone:
General fund surpluses predicted through 2035
– Incorporating impacts from Volvo:
General fund surpluses predicted (albeit declining) through 2035
• Without millage “rollback” (149.2 millage rate):
– RFA population projections alone:
General fund surpluses predicted through 2035
– Incorporating impacts from Volvo:
General fund deficits predicted beginning in 2020 through 2035
Projected Revenue & Expenditures
Based on RFA Population Projections (without Volvo)
$350
$290
$260
$230
$200
Expenditures
Revenue (incl. Interfund Trans.)
Revenue w/o Rollback
2035
2034
2033
2032
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
$170
2016
Millions of 2014 Dollars
$320
Projected Revenue & Expenditures
Incorporating Estimated Volvo Impacts
$380
$350
$290
$260
$230
$200
Expenditures
Revenue (incl. Interfund Trans.)
Revenue w/o Rollback
2035
2034
2033
2032
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
$170
2016
Millions of 2014 Dollars
$320
School
Construction
Needs Projections
BCSD School Construction Projections
• School-age population projections used to predict need
for new school construction through 2035
– 89% of school age population assumed enrolled in BCSD schools
(based on historic ratio – remainder either homeschooled or attending school
in adjoining county)
– Age cohorts provided by RFA data used to apportion enrollment
between elementary (primary), middle (elementary), and high
schools.
– Note: currently-planned new schools are treated as pre-existing
• School construction projections used to project future
debt service costs (2% annual inflation rate applied to construction costs)
– Assumed 5% coupon rate, 20-year term for new bond issues
– Current outstanding debt included in debt service projections
Based on RFA Projections
(without Volvo)
Projected Total Enrollment
Based on RFA Population Projections (without Volvo)
60,000
55,000
50,000
40,000
35,000
30,000
25,000
Low Estimate
High Estimate
2034
2032
2030
2028
2026
2024
2022
2020
2018
20,000
2016
Pupils
45,000
Projected School Construction Needs
RFA “Low” Forecast
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Elementary (600)
49
49
57
49
57
163
172
172
172
172
212
212
221
212
221
237
237
Scenario One - RFA minus 5 percent
Cumulative Middle (936) Cumulative High (1600) Cumulative
49
204
204
125
125
98
212
416
265
390
155
204
620
175
565
204
212
832
188
753
261
212
1,044
286
1,039
424
(16)
1,028
230
1,269
596
155
1,183
21
1,290
768
74
1,257
(69)
1,221
940
65
1,322
37
1,258
1,112
74
1,396
70
1,328
1,324
180
1,576
181
1,509
1,536
172
1,748
242
1,751
1,757
180
1,928
109
1,860
1,969
180
2,108
60
1,920
2,190
172
2,280
50
1,970
2,427
237
2,517
109
2,079
2,664
229
2,746
118
2,197
Projected School Construction Needs
RFA “High” Forecast
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Elementary (600)
54
54
63
54
63
181
190
190
190
190
235
235
244
235
244
262
262
Scenario Two - RFA plus 5 percent
Cumulative Middle (936) Cumulative High (1600) Cumulative
54
226
226
138
138
108
235
461
293
431
171
226
687
193
624
225
235
922
208
832
288
235
1,157
316
1,148
469
(18)
1,139
254
1,402
659
172
1,311
23
1,425
849
81
1,392
(76)
1,349
1,039
72
1,464
41
1,390
1,229
81
1,545
78
1,468
1,464
199
1,744
200
1,668
1,699
190
1,934
267
1,935
1,943
199
2,133
120
2,055
2,178
199
2,332
67
2,122
2,422
190
2,522
55
2,177
2,684
262
2,784
120
2,297
2,946
253
3,037
130
2,427
Projected School Construction Costs
Based on RFA Population Projections (without Volvo)
$160
$140
$100
$80
$60
$40
$20
Low
High
2035
2034
2033
2032
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
$0
2020
Millions of Current Dollars
$120
Projected Annual Debt Service Cost
Based on RFA Population Projections (without Volvo)
$110
$100
$80
$70
$60
$50
Low Estimate
High Estimate
2035
2033
2031
2029
2027
2025
2023
2021
2019
2017
$40
2015
Millions of Current Dollars
$90
Projections Incorporating Volvo Impact
Projected Total Enrollment
Incorporating Estimated Volvo Impacts
60,000
55,000
50,000
40,000
35,000
30,000
25,000
Low Estimate
High Estimate
2034
2032
2030
2028
2026
2024
2022
2020
2018
20,000
2016
Pupils
45,000
Projected School Construction Needs
Volvo “Low” Forecast
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Scenario One - Volvo minus 5 percent
Elementary (600) Cumulative Middle (936) Cumulative High (1600) Cumulative
169
169
301
301
171
171
170
339
309
610
310
481
176
515
299
909
223
704
163
678
307
1,216
235
939
311
989
406
1,622
383
1,322
419
1,408
260
1,882
324
1,646
428
1,836
272
2,154
118
1,764
426
2,262
272
2,426
31
1,795
420
2,682
263
2,689
137
1,932
415
3,097
282
2,971
170
2,102
450
3,547
391
3,362
339
2,441
526
4,073
450
3,812
320
2,761
553
4,626
480
4,292
253
3,014
560
5,186
495
4,787
215
3,229
560
5,746
504
5,291
229
3,458
544
6,290
586
5,877
299
3,757
635
6,925
591
6,468
321
4,078
Projected School Construction Needs
Volvo “High” Forecast
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Elementary (600)
187
188
194
181
343
463
474
470
464
459
498
582
611
618
618
602
701
Scenario Two - Volvo plus 5 percent
Cumulative Middle (936) Cumulative High (1600) Cumulative
187
333
333
189
189
375
341
674
342
531
569
331
1,005
247
778
750
339
1,344
259
1,037
1,093
448
1,792
423
1,460
1,556
288
2,080
358
1,818
2,030
300
2,380
130
1,948
2,500
300
2,680
35
1,983
2,964
291
2,971
151
2,134
3,423
312
3,283
188
2,322
3,921
433
3,716
375
2,697
4,503
498
4,214
354
3,051
5,114
530
4,744
279
3,330
5,732
547
5,291
237
3,567
6,350
558
5,849
253
3,820
6,952
648
6,497
331
4,151
7,653
653
7,150
355
4,506
Projected School Construction Costs
Incorporating Estimated Volvo Impacts
$250
$150
$100
$50
Low
High
2035
2034
2033
2032
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
$0
2020
Millions of Current Dollars
$200
Projected Annual Debt Service Cost
Incorporating Estimated Volvo Impacts
$110
$100
$80
$70
$60
$50
Low Estimate
High Estimate
2035
2033
2031
2029
2027
2025
2023
2021
2019
2017
$40
2015
Millions of Current Dollars
$90
Projected Annual Debt Service Cost
Without Volvo (for comparison)
$110
$100
$80
$70
$60
$50
Low Estimate
High Estimate
2035
2033
2031
2029
2027
2025
2023
2021
2019
2017
$40
2015
Millions of Current Dollars
$90
Conclusions
• Fiscal outlook:
– Additional population growth associated with Volvo will
place substantially increased demand on the District
– Growth in revenue sources (given current millage rates,
including “rollback”) are projected to be sufficient to cover
additional general fund expenses up to 2035
• Millage increase likely necessary soon after 2035
• Construction needs:
– Student-age population increases associated with Volvo
will require substantial new school construction after 2020
– Debt service costs will increase as a result, although partly
offset by retirement of some current debt
Other Considerations
(Not included in our analysis)
• Construction of larger schools
• Overcrowding
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