Some Charleston County Council members are questioning why they should commit to a roughly $6 million property tax increase when the government then would have $34 million in the bank that it doesn't plan to spend.
The possibility of hurricanes and earthquakes and maintaining the county's top-quality bond rating are the reasons why the reserve funds shouldn't be tapped, according to administration officials.
As County Council continues to hammer out another tough budget -- with a third straight year of service cuts and reduced spending -- a minority on the council are digging in against proposed property tax increases estimated to cost the typical homeowner about $20. Property taxes would rise because the budget calls for an increase in the tax rate that funds county debt payments, and a decrease in the tax credit funded by the local option sales tax.
"I just can't think of a worse thing to do in this economy than to raise taxes on the people who are struggling out there right now," said Councilman Joe McKeown. "We're being asked to raise taxes, and we have all this money just in case."
McKeown and Councilman Dickie Schweers suggested the county could go deeper into its reserve funds in order to avoid raising taxes, but it would take five votes on the council to change the budget plan presented by the administration and recommended Thursday by council's Finance Committee.
The county currently has top bond ratings from major agencies, and those ratings work like credit scores do for an individual. Good credit means lower interest rates when borrowing money, and the county has some borrowing to do related to major road projects, greenbelt funds and the expansion of the county jail.
Budget Director Mack Gile told council members that keeping a reserve fund worth about two months of expenses is what rating agencies want to see, and that amount, $27 million, is what the county hopes to maintain. An additional $7 million sits in a "rainy-day" fund in case there's a calamity such as a hurricane or earthquake.
The city of Charleston, with a smaller annual budget, maintains a rainy-day fund roughly twice that size.
County Councilman Paul Thurmond noted that the county also has a large amount of money in reserves for waste management and asked if that could be drawn down to help balance the budget. He was told the waste management and stormwater reserve funds were generated by fees for stormwater and waste services and under state law can be used only for those purposes.
A first council vote on the budget ordinance and $167 million spending plan is scheduled Tuesday evening, with a public hearing and second vote scheduled June 1.
In other business, County Council was given the recommendations of the Greenbelt Advisory Board, which had been asked to consider changes and improvements to the greenbelt plan. The board recommended no major changes, but suggested creating more opportunities for small landowners to participate in the program.