Daniel Rickenmann May 2017

Daniel Rickenmann

Columbia City Council is considering a number of measures to shore up a potential multimillion-dollar shortfall in next year's budget, including a "public safety fee."

Council members also indicate they'd be willing to discuss restructuring the city's business license ordinance to collect business license fees from certain nonprofits.

City staff is in the process of putting together the 2020 budget, which would go into effect in July of this year. While it is still a work in progress, at present the requested general fund budget is at about $155 million, and is not yet balanced, with a shortfall of about $3.3 million.

A chief issue in the general fund's struggles, according to city budget director Missy Caughman, is a lack of revenue growth, particularly in city property taxes.

“As we’ve talked in prior conversations, we, as staff, are not comfortable that revenue growth in property taxes is growing at a level to sustain the growth in the overall budget,” Caughman told Council members in a May 21 meeting.

As noted by City Manager Teresa Wilson, Council has not increased city property taxes in a decade. The decision to continue to bypass a tax hike for that long has an impact on the city's finances.

“This body has not raised taxes for over 10 years," Wilson said May 21. "I do have to say that is not necessarily the most responsible approach, to not raise taxes incrementally for years and years and years.”

As ever, the city's budget is hampered by the fact that — in a city that is dominated by state government, colleges and other nonprofit entities — an extraordinary percentage of the city's land is not on the property tax rolls. In all, nearly 30 percent of the property in the city is not taxed.

Officials are now turning to other possibilities to help shore up the general fund.

One idea being pitched by city staff is a public safety fee of $5 a month — $60 per year — that would be paid by residents, businesses and nonprofits. The fee would be collected per parcel, through the water bills of entities within the city limits. Funds from that fee would be used only for public safety equipment and technology. 

As proposed, the public safety fee would generate $2.5 million per year.

Councilman Moe Baddourah asked Caughman specifically how much the University of South Carolina — a state agency, but a major user of city services — would pay via the public safety fee. The budget director responded that staff has not examined specific parcels, but calculated its estimates through a citywide lens.

Councilman Daniel Rickenmann chipped in that he thought USC "ought to be paying $5-7 million a year" to the city.

"If you start proposing a $5 fee on a water bill, you aren’t going to ever get to the level we really want to get, which is bringing in a level playing field," Rickenmann said.

The District 4 Councilman also was against the idea of homeowners who already pay taxes for public safety being asked to pay an extra $5 a month fee.

“The bulk of people [who would be] paying it are paying for it already," Rickenmann said. "We are double taxing our own folks.”

Council members on May 21 also bandied about other ways to get fees from entities that are tax exempt. One idea: changing the city's business license ordinance to remove exemptions for nonprofits.

"That's within the authority of the cities in South Carolina," Councilman Howard Duvall, the former director of the state Municipal Association, tells Free Times. "We would go and look at some of these organizations that are operating under the nonprofit umbrella, and maybe say that they have to get a business license. 

"Some of those things might be, for instance, where we've had [many] doctor's offices that have come off of the tax rolls and the business license rolls as they have been brought under the umbrella of hospital chains. We would [potentially] be able to go in and reinstate a business license fee on those operations."

District 3 Councilman Moe Baddourah has long banged the drum of seeking ways for the city to find revenue from nonprofits. A few years go he floated the idea of wanting to get business license revenue from local hospitals, but the idea went nowhere.

On May 21, he again pushed his colleagues to explore revenue opportunities with dominant area nonprofits.

“With all due respect for everybody’s opinion, this Council, and every Council in the past, we always go around and around and dance around the subject of the nonprofits not paying their share of providing services, the revenue to provide services," Baddourah says. "I think there is enough Council will that this is the year we bring that to the table and bring it to reality. We can talk about [tax] millage or increasing franchise fees or all that stuff. We are still back to the same principle: Everybody has to pay their share. Whether you are the University of South Carolina, whether you are the hospitals, anything.

"You have to bring some kind of level of revenue or responsibility for us as a city government to give you the services you need.”

Rickenmann seemed to agree with Baddourah.

“You’ve got a whole group of people that come in here and are using all the services and they are not paying," Rickenmann said. "You can’t pay your director $200,000 a year and say you have no money to share in costs. It’s not right, I’m telling to you.”

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