A 1 percent local-option sales tax — a tax to reduce property taxes, in theory — can be hard to sell. Dorchester County voters will have another chance to say yes or no in November.
Local-option sales tax referendum
The tax: 1 percent.
The revenue: $8 million (expected the first year).
- 5 percent of the total revenue could be withheld by the state to be distributed among counties with a local-option sales tax with low revenue.
-At least 71 percent of remaining revenue to property tax relief as a tax-bill credit based on property value.
- 29 percent to property tax relief or other county and municipal uses.
- 67 percent of the 71 percent to county property owners.
- 33 percent to municipal property owners, based on population.
- Municipal property owners would receive the county and municipal credit.
Source: The Municipal Association of South Carolina
The ballot question
“Must a one percent sales and use tax be levied in (Dorchester) County for the purpose of allowing a credit against a taxpayer’s county and municipal ad valorem tax liability and for the purpose of funding county and municipal operations in the (Dorchester) County area?”
Source: S.C. Legislature Online.
County Council unanimously approved a referendum for the general election Nov. 5.
If the referendum is approved, the tax could bring in as much as $8 million the first year. but what it would mean for residents’ property tax bills is still up in the air.
The sales tax revenue would have to be divided among the county and municipalities, as well as paid into a state pool. Plus, a percentage of the revenue can be diverted to other uses.
County leaders are seeking the tax specifically to use as a credit on the property tax bill, and “it has been very common in recent years for counties to pledge more than the minimum” to that use, said Eric Budds, Municipal Association of South Carolina deputy executive director.
Approval of this vote is not a done deal, even though the tax has long been in place in neighboring Berkeley and Charleston counties. Sales tax revenues are economy dependent; when sales drop, the credit shrinks and the tax bill goes up.
Four times already, the county has taken the tax to the polls. Four times, voters said no. The most recent vote was in 1998.
County voters are riled about taxes in general, and groups have organized to battle them. It will take some explaining to cull support for any kind of new tax, county leaders agree.
So do leaders of those groups. John Braund of the Dorchester County Taxpayers Association, called it a tax shift.
“In our opinion, they are attempting once again an exercise in the politics of greed. The very poorest people in our community will suffer the most,” he said.
LowCountry 9/12 in general supports fair tax or flat tax, “and just eliminate the other taxes,” said member Linda Ensor. The group likely will oppose the local option referendum, she said.
The recurrent opposition has frustrated council Chairman Bill Hearn somewhat.
“It’s troublesome that Dorchester County citizens have voted against this in the past, yet go across county lines and pay it. They support it everywhere but Dorchester County, and I hope that will change,” he said.
If the tax is approved, collection would begin the following May.
County Council held the line on property taxes this year, but the tax bill will climb because bonds have been approved to:
- Pay for a new jail, and are expected to add $12 to taxes for the owner of a $150,000 home.
- Build four new Dorchester District 2 schools and renovate 10 others; the $180 million bonds were passed by voters last year. They could be phased in, but also could raise taxes on a $150,000 house by as much as $102 annually.
The referendum will be held as a de facto special election in a vote that otherwise features municipal races. Hearn said council agreed that the revenue potential far outweighed the minor costs to hold the election.
“The right thing to do is giving to the public the option to vote on it,” he said.
Reach Bo Petersen at 937-5744, @bopete on twitter or Bo Petersen Reporting on Facebook.