Rock Hill leaders will ask the state to
let them impose a city sales tax they say could reduce residential
property taxes within two years.
City officials say they will push the state Legislature to allow an
additional half-cent sales tax within the city. They say it would offset
property taxes by generating as much as $3 million a year, thereby
reducing city property taxes by about 25 percent.
Current state law doesn't allow cities to do this.
But the move -- one of dozens of potential cost-savers and
money-makers discussed by staffers during a workshop Tuesday -- is one
city officials say could find support elsewhere in the state.
But officials with the Municipal Association of South Carolina say
convincing the state to grant the request could be a tough sell.
"I think it has unique possibilities," Mayor Doug Echols said. "There
needs to be discussion statewide as to how we're going to fund local
governments without relying solely on property taxes."
Assuming the General Assembly gives the OK, the new tax would likely
then be put to Rock Hill voters in a referendum. If residents approved
it, officials said the earliest property taxes could be cut would be
2006.
Aside from giving tax relief to property owners, the new tax would
also expand the tax base to nonresidents who shop in Rock Hill, leaders
said.
But the state's approval is anything but certain. The Municipal
Association will support the tax, officials there said. But legislators
likely will be tougher to convince, given that they've rejected similar
proposals before.
Gary Cannon, director of intergovernmental relations for the
association, said a municipal sales tax would be "on the list" of
proposals to take before the General Assembly in the upcoming session.
However, "we don't see that as being high on the list of being
attainable," he said.
"If Rock Hill folks want to get their legislative delegation behind
that, we would certainly work to support it," Cannon said.
Rep. Gary Simrill, R-Rock Hill, said the idea may have merit.
"Certainly, I'm willing to look at that possibility within the city,"
he said. "It certainly is worth exploring if you could have a reduction
in taxes."
But, he said, there would need to be safeguards to make sure the tax
wasn't a "short-term fix." He said he would need assurance that city
leaders wouldn't go back later and raise property taxes while keeping
the sales tax increase. Simrill said his preference would be eliminating
property taxes in favor of the sales tax.
The proposed sales tax falls in line with a city goal to find
alternative sources of money and to start thinking about next year's
budget before spring, Rock Hill's traditional budget season. Other
high-priority projects the city will consider include privatizing
services, which could include sanitation collection, and auditing all
city departments to reduce inefficiencies.
Other efforts already under way include a program to allow for
maximum collections of fines in city court. The city has about 15,000
outstanding warrants and more than $900,000 in outstanding fines.
Collecting 20 percent of that would mean an additional $205,000 for the
city, officials said.
With growth in the city far outpacing revenues, leaders have a sense
of urgency to find more revenue, City Manager Carey Smith said.
"We did not put down savings that we were not very, very confident of
generating," he said.
Echols praised staffers for their willingness to "think outside the
box."
"We got that today," he said. "It gave us an awful lot to think
about."
Jason Foster • 329-4066
jfoster@heraldonline.com
