With the outcome of the Charleston mayor election now on hold until a runoff election in two weeks, among the remaining ongoing issues is how to raise the money that’s needed to pay for all the massive projects that have to be done — particularly flood control. Major sources of city budgetary revenue include property taxes, business licenses and, yes, parking fees. Revenue from tourism, hospitality and accommodations doesn’t even exceed that which the city makes off parking, according to information disseminated at a recent mayoral campaign rally.
Peninsular Charleston, believe it or not, only has about 35,000 residents. The tourist burden to the peninsula is about $7.3 million per year which, on average, is about 20,000 visitors daily. Factoring in the number of employees who drive into the city every day to accommodate those visitors (and perform other jobs), it’s fair to say that city expands to at least 70 percent above its baseline population on a daily basis just to accommodate the tourist trade. And people wonder why things are so crowded. What they should be wondering is why we haven’t figured out a way to further tap into that gold mine as a city revenue source to fund its projects.
Question: Guess what percentage cut the city gets out of the cruise ship business, that same business which unloads tourists onto terra firma in the historic district so that they may shop the market area, further congest our already crowded streets, while the ships themselves (which seem to be getting larger and total about 104 berths annually) disrupt the skyline and belch out smoke? Answer: Zero. Would it not be a relatively straightforward matter to tag on, for example, a $10 per capita surcharge as a port fee which would be passed on to visiting ship passengers? Evidently not, because surely it would have already been done by now.
Meanwhile, and some would say unfairly, peninsular property owners are asked to fund a significant portion of the city’s annual budget in the way of property tax (the city’s main source of revenue) for reasons — at least in the case of legacies — that are beyond their control.
Charleston, in addition to being a major tourist destination, has a limited number of antique houses that are now subject to the inflationary supply and demand market forces that have sent prices through the roof and driven up property taxes. (Not so much anymore perhaps on the western peninsula, where flooding appears to have taken a toll on real estate sales and property values.)
Anyway, the subject of property taxes has long gotten under the craw of my friend Jack Simmons, who takes great issue with the concept of property owners in the historic district paying their “fair share” of property taxes. “What’s the definition of fair?” he asks, in remarks he had written down and showed me recently (edited for brevity.):
“Comparing assumed income to home value is a flawed correlation when considering that property taxes have destroyed the ability of long-term families to reside in the East Side as well as led to super-gentrification in the Old and Historic Districts. Previously stable neighborhoods are disrupted, fostering a loss of a sense of community as the high taxes produce de facto economically gated areas.
“There is no fairness in property taxes. As long as the home is taxed one does not own it but is essentially paying rent to the government. It’s unfair if one’s income does not keep pace with rapidly escalating home values and further unfair that citizens are punished for good behavior when home improvements trigger higher taxes.
Simmons worked tirelessly with the late Marion Reid to help get Act 388 passed, thereby providing some property tax relief. “Act 388 is doing exactly what was intended: Giving homeowners some tax relief while still funding schools operations via sales tax revenue. Any tampering with Act 388 could result in a doubling of one’s property tax.”
Dr. Simmons suggests visiting www.nohometax.org to learn more about this issue. He further feels adding another penny to the sales tax would solve much of the problem.
The bigger realities are that property taxes and parking fees are anachronistic and outmoded sources of local revenue in the context of vitally important projects that face tens of millions of dollars of budgetary shortfalls.
Want to know why? Well, sit down and relax while I go through all 7.3 million reasons.