Most of the discussion about the budget at Charleston City Council on Tuesday was not about whether to raise taxes, but by how much.
The requests for funding -- better wages for city employees, fire stations on Johns Island and Cainhoy, stormwater infrastructure -- are all reasonable enough. But Charleston officials need to have a broader discussion about how a growing city can better pay for itself moving forward.
City Councilman Mike Seekings raised that point heading into Tuesday’s meeting, warning that Charleston may be too reliant on property taxes.
It’s a valid concern. Less than half of the city budget gets funded through property tax revenue, but it’s still the largest single stream of money.
It’s also perhaps the riskiest one for the city to hike. Increasing property taxes means raising the cost of living in Charleston -- particularly for renters and low-income or fixed-income residents. And that risks pushing people out of the city limits and exacerbating other problems like traffic congestion that end up costing even more tax money to fix.
To be sure, the tax hike that council gave initial approval on Tuesday is a relatively paltry amount for the average Charleston resident. And again, the things it will pay for are worthwhile. But even small tax increases add up, particularly for people already struggling with housing affordability.
One challenge, however, is that the city has already pretty much maxed out every other tax or user fee allowable under South Carolina law. New flexibility would require state permission, and so far that hasn’t happened.
The state Legislature is likely to consider a tax reform package in the upcoming session. Granting cities such as Charleston the ability to channel accommodations tax money toward flooding prevention or charge a head tax on cruise passengers ought to be on the table.
Charleston needs as many sources of revenue as possible to pay for massively expensive but crucial projects that will help the city survive rising seas and stronger storms -- not to mention the flooding we’re already experiencing. It’s irresponsible and shortsighted for state officials to limit those opportunities.
But there is also a broader debate that has to happen about Charleston’s budget sustainability, as evidenced in the need for two new fire stations in relatively remote and previously rural parts of the city.
The ways in which Charleston has grown in the past -- annexing far away from downtown to build bedroom communities -- often added significant costs in terms of paying for new services, without providing enough new revenue in the form of property taxes to pay for those services.
Those choices have already been made, of course, and in most cases long before Mayor John Tecklenburg and sitting council members took office.
Charleston's geographical boundaries grew more than 13 times larger under Mr. Tecklenburg's predecessors Joe Riley and Palmer Gaillard, for example. The city's population roughly doubled during that time.
But we can make the math work again by adjusting how the city continues to grow and better ensuring that the long-term benefits of that growth outweigh the long-term costs. Ideally, new homes and businesses should lower the tax burden on everyone else, not raise it.
Some ideas to re-balance that equation are already in the works or have been recently discussed, like setting up a tax increment financing district in West Ashley to help pay for Church Creek drainage solutions or asking new development on Johns Island to chip in for related services and infrastructure.
City Council made a sensible enough decision to address immediate needs via a tax increase Tuesday. Figuring out why an otherwise thriving, prosperous city needs to raise taxes ought to be the next step.