EDITORIAL
Easing the
Sting Liberalized impact fees would
make tax swap less painful for Horry
There was only one bright spot for Horry County in Gov. Mark
Sanford's endorsement last week of the legislative effort to
eliminate residential property taxes by raising the state sales tax
2 cents. In his State of the State speech, Sanford acknowledged that
rapid population growth drives property taxes ever higher. He
implored legislators to empower local governments to require new
residents to pay a greater share of the infrastructure and public
services costs that stem from their migration here. His preferred
means of doing this would be liberalized impact fees.
Make no mistake: Even with a tax-swap plan that allowed local
governments much broader latitude to impose impact fees on
developers, Horry County still would suffer. Raising the sales tax
while eliminating the residential property tax would:
Drive up taxes on commercial and industrial properties.
Cripple Horry County Schools' ability to finance academic
improvement locally.
Raise the cost of Grand Strand vacations.
Make it virtually impossible for local governments to enact
local-option sales taxes.
Siphon even more sales tax money from Horry County to school
districts elsewhere in the state.
Still, Sanford's endorsement of impact fees will come as great
news to readers who believe that developers should have to provide
new schools and other infrastructure, as well as new public-safety
personnel, to accommodate new residents. These costs would be added
to the construction costs of hew houses.
Right now, the state, with the enthusiastic support of the
development lobby, restricts the purposes for which counties and
municipalities can levy impact fees. Current law bars local
governments from imposing impact fees to pay for schools, police and
fire salaries and the other high-dollar expenses that must be made
to keep pace with growth. The only other comprehensive resource that
local governments have to defray growth costs is the property
tax.
Does Sanford have the clout to impel legislators to broaden local
governments' power to initiate local impact fees? That's not yet
clear.
Certainly, the state's powerful development lobby would object.
Only a few years back, that lobby managed to shrink the scope of the
impact fee law to the point where it's now virtually useless to
fast-growing counties such as Horry - increasing the upward pressure
on the property tax.
The ideal outcome for this debate would be no change in the law
at all. But if the governor and S.C. legislators lack the political
will to resist raising sales taxes to buy down the residential
property tax, they should at least summon the will to override
developers on impact
fees. |