Charleston City Council on Tuesday night narrowly granted itself the authority to withhold some property tax money normally passed to residents, part of an effort to make up an estimated $18 million revenue shortfall brought on by the coronavirus pandemic.
Under the current budget proposal, a $300,000 home that is owner-occupied in Charleston County, would see an approximate $81 increase in taxes for the year. The same home in Berkeley County would see an approximate $58 increase.
Normally, city taxpayers receive a rebate on their property tax bills through Local Option Sales Tax money. Local Option Sales Tax, or LOST money, usually softens the blow of city taxes.
Under state law, municipalities must roll back 71 percent of that money to taxpayers. Council decided in a 8-5 vote while sitting as the Ways and Means Committee, to give itself the option to retain anywhere from 25 to 75 percent of the the accessible 29 percent. It did not approve withholding any money during any meetings Tuesday.
Council members Kevin Shealy, Jason Sakran, Mike Seekings, Harry Griffin and Marie Delcioppo voted against it. Delcioppo, who represents Daniel Island and a slice of downtown, described the proposed tax increase as "kicking people when they’re down" and wanted Council to consider cutting back on certain expenses for a year or two.
At an afternoon budget meeting, Councilman Ross Appel brought up the first idea of cutting the city's recreation department — $2 million for aquatics, $667,000 for Bees Landing Recreation Center, $1 million for the Daniel Island Rec Center, $734,000 for tennis facilities, $630,000 for Dock Street Theater, $320,000 for gymnastics and $376,000 for youth sports — and challenged other council members to produce a list of proposed cuts.
Griffin and Seekings said in the Ways and Means Committee meeting they would not support withholding LOST money. Seekings said City Council "needs to do better."
Under the proposal, the city tax rate would increase from 74.3 mills to 77.3 mills and, instead of passing along 100 percent of the LOST funding to taxpayers, the city would keep half of it, meaning higher tax bills. A mill is $1 for every $1,000 in taxable property value.
That would still leave an approximate $5.3 million deficit to fill, which Chief Finance Officer Amy Wharton proposed using the city’s fund balance to make up. That would mean that no city employees would receive a pay reduction.
Another option to make up the revenue deficit would mean cuts equivalent to laying off 40 police officers, 31 firefighters, 23 recreation department employees and 13 sanitation and streets workers, in addition to "equally deep personnel cuts across the rest of city government," city officials said.
The city has not received any federal coronavirus-related relief funding. If that funding becomes available, several Council members said they would change the tax rate back to its earlier proposal.
The U.S. House of Representatives passed a funding package that would have granted $38 million in relief funds for Charleston this year and $18 million next year.
A public hearing on the budget is scheduled for Dec. 1, the same night City Council will consider giving the budget a first reading approval. Two subsequent readings are required before the budget can go into effect.