Want more police? Better garbage service? Too bad, Legislature says

By CINDI ROSS SCOPPE

Associate Editor

BLYTHEWOOD doesn’t have a police department or fire department or its own garbage collection. And under the budget it passed last month, it doesn’t have a property tax.

What that means is that Blythewood residents will probably never have the option of increasing their police, fire, garbage and other services to the level that city-dwellers often want. That’s because of a new state law that will make it dicey if not impossible for any municipality that isn’t collecting property taxes on Jan. 1 ever to do so.

The problem is the way the Legislature’s new millage cap law intersects with the laws of math. State law says cities and counties can only increase property tax rates by the rate of inflation plus population growth; so if inflation is 3 percent and the population grows by 2 percent, the tax rate could be increased by 5 percent. But the laws of math say if you increase zero by 5 percent, you still get zero.

The S.C. Municipal Association’s Howard Duvall thinks “a reasonable interpretation” of the law would let Blythewood and other no-tax municipalities institute a property tax later, and he convinced the town that it could safely zero out its property tax without limiting its options. But he admits the law doesn’t actually say that. And Blythewood town administrator John Hicks doesn’t dispute my contention that the out — which allows a tax increase to pay for a “deficiency of the preceding year” — might well be rejected by the courts if the town tried to use it to pay for services it doesn’t already provide.

The Blythewood case is an extreme example, although it’s certainly not unique; Irmo, Arcadia Lakes and Pine Ridge don’t collect property taxes either. The more common problem is how the tax cap affects all counties and most cities, which do levy property taxes. (The cap also limits school taxes, but I believe there are legitimate reasons to do that, which I don’t have room to get into in this column.)

Our Legislature has decided that every city and town and county in South Carolina is providing all the services it needs to provide (or ever will need to provide, even as it grows from sleepy hamlet to suburban sprawl), and so none of them can ever raise property taxes more than what it takes to maintain the current level of services as the population grows and inflation makes each dollar buy less.

Even if the county council or city council votes unanimously to increase taxes more than that. Even if every single adult who lives in the city or county were to sign a petition demanding higher taxes. They’d just be out of luck, because the Legislature knows better than they do what their taxes should be.

Nobody likes to pay taxes. But practically everybody likes at least some of the things that taxes pay for — police and fire protection, roads and bridges, trash collection, schools, parks, libraries.

But if the people in Lexington decided they wanted to double their police force, and were willing to pay higher property taxes for that extra level of protection, they wouldn’t have that option unless, say, they shut down their garbage collection to come up with the money. Several counties don’t have ambulance services; starting Jan. 1, they won’t be allowed by law to increase property taxes in order to create one.

One provision in state law lets neighborhoods create special taxing districts so they can borrow money to pay for street lights or to resurface roads that weren’t deeded to the county or to provide other infrastructure that the county doesn’t provide and that the homeowners can’t afford to pay for all at once. Will that still be an option under the new law? The Association of Counties’ Robert Crooms doesn’t think so, but he still has to research it. I don’t see how it could be.

The issue isn’t whether taxes should be higher or lower. The issue is who should decide.

This year, a vocal minority of voters who don’t think they should have to pay any property taxes convinced legislators that they would be defeated at the polls if they didn’t take that decision out of the hands of the people who actually pay the taxes in each community.

Anti-tax zealots say cities and counties still have plenty of flexibility — as in my Lexington example, they can stop collecting garbage in order to save enough money to hire more police. And there is much to be said for trying to cut current expenses before you take on new expenses. Again, though, the question is who should make that decision. Effective Jan. 1, no one can, because the Legislature has already made it for all of us.

Local governments can only exceed the cap in order to comply with a court order or state or federal law mandating increased spending; to cover a debt from the previous year; to pay for a “catastrophic event” such as a natural disaster, terrorist attack or fire; or to make up for money lost when a large business closes, cutting overall tax revenues by at least 10 percent.

Some early versions allowed a supermajority of the city or county council — say 75 percent — to override the cap and set the taxes at a higher level just because the people in that community wanted more services. Other versions allowed voters to override the cap in a public referendum. But somehow those bypass provisions were stripped from the final version of the law.

The law does allow one option for people who want better fire or police protection or more frequent garbage pick-up or a host of other local services that their city or county doesn’t provide: They can always move.

Ms. Scoppe can be reached at cscoppe@thestate.com or at (803) 771-8571.