Berkeley confronts budget dilemma

MONCKS CORNER — Darned if they do, darned if they don't.

That's how several Berkeley County Councilmen look at Supervisor Dan Davis' capital improvements proposal intended to pay for a jail expansion and improve roads, among other long-term projects.

To pass them would require some type of tax increase because the money is not included in the current operations budget.

Council's choices are to borrow the money, impose a straight increase on property tax bills or renege on a decade-old pledge by using as much as 29 percent of the county's 1-cent sales tax money, which currently goes toward tax relief for property owners.

It's not an appealing option to a council that hasn't increased taxes in 15 years and just increased water and sewer rates and fees by 30 percent to cover an annual $6 million shortfall in its water and sanitation budget.

But if they don't approve it, council members have the equally appealing task of telling voters why a dangerous stretch of U.S. Highway 17A wasn't widened, why the jail is still overcrowded and why it doesn't have the matching funds for a new Interstate 26 interchange that will help benefit a massive port-driven industrial park near Jedburg.

"I think it's going to come down to making some tough political decisions," Councilman Jack Schurlknight said. "It's going to be tough politically."

Recognizing the dilemma, Davis will present the pros and cons of each of the four options Monday night at council's monthly committee meeting.

The options are:

--Don't pass the capital improvements plan.

Councilmen agree that the jail expansion and the U.S. 17A widening project are both major safety hazards that need to be addressed quickly.

Councilmen said the county could face lawsuits if either a deputy or an inmate is hurt at the overcrowded facility.

"We have to build that jail," Councilman Dennis Fish said.

The county also would lose its ability to pay for the road projects. Both the U.S. 17A and the I-26 interchange are dependent on using the capital improvements money.

--Borrow the money.

This is also an unappealing option for a county that is still paying interest on millions of dollars of loans. Davis said the county only has about $15 million left in borrowing capacity and that borrowing more would necessitate a tax increase to pay attorney fees and interest.

It also goes against Davis' and council's hopes of using a recurring source that will allow the county to pay as they go.

--Use the sales tax or raise property taxes.

Davis and some councilmen say they think using the sales tax, which could bring in an estimated $3.4 million a year, would have the least impact on taxpayers.

Raising property taxes would impact county residents, while the sales tax is paid for by residents and non-residents.

Davis said sales tax revenue is growing so much each year that residents might not even notice a change on their tax bills.

But then there is the issue of the 12-year-old pledge council made to use 100 percent of the sales tax on property tax relief after residents voted against it on a referendum. Voters approved it once the pledge was made.

Davis reasons that using the money won't violate the pledge because it will prevent the county from having to raise taxes.

"Some people say that is double-speak but it's offsetting a millage increase," Davis said.

Fish said the county should call it what it is: a tax increase. "Any time you take something away from taxpayers, it's a tax increase," he said.

He and other councilmen say they have issues with reneging on a promise, even if no one on council was there when it was made. Fish said the right thing to do might be to raise taxes so they don't go back on the promise.

Davis and councilmen say they will also discuss ways to minimize the impact of using the sales tax, either by imposing a sunset clause or not using the entire 29 percent allowed by law.

Either way, Davis said, the final decision is up to council.

"It's really up to them. They have the alternatives."

Reach Andy Paras at 745-5891 or aparas@postandcourier.com.