Posted on Thu, Jan. 18, 2007

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Refund sought by irate owners

S.C. high court hears arguments

By Zane Wilson

The Sun News

COLUMBIA - Georgetown County property owners who say they were overtaxed for almost 10 years want to sue to get their money back, but the question is where and how.

The state Supreme Court heard arguments Wednesday from a lawyer for about 25 taxpayers and a lawyer for the county schools, auditor and treasurer who disagree on how to deal with the case.

The county schools say they have paid the money back with lower levies.

The case has its beginnings in 1994, when former Auditor Edna Earle Freeman began setting the school millage rate too high, resulting in more money than the school district needed, said Gene Connell, the plaintiffs' attorney.

When the extra money was discovered several years later, a group of taxpayers sued but Circuit Judge Steven John dismissed the case on grounds the plaintiffs did not use their administrative appeals. The state Appeals Court agreed with the circuit judge and the plaintiffs appealed to the Supreme Court.

Connell, a Surfside Beach attorney, said the schools received $20 million more than they should have over the 10-year period, but some of that can't be refunded because the statute of limitations has passed.

Connell said the law that requires taxpayers to first press appeals through the Administrative Law Court is for state income taxes and disputes over assessments. It is not for refunds of overtaxation.

"If you look at all these statutes, it is the most confusing thing you can think of," Connell said.

"There is nothing in the code which talks about this type of violation."

Justice Costa Pleicones said the law states that "any case" involving tax disputes must go to the Administrative Law Court, but Connell said the law left local government refund disputes with the circuit courts.

David Duff, attorney for the schools and county officials, said the Administrative Law Court is the proper venue because its judges are familiar with tax issues and the state needs uniform decisions on such topics.

"This isn't an ordinary suit for a refund, this is a contention that the county has illegally assessed millage," said Chief Justice Jean Toal. That could make it a circuit court case, she suggested.

Duff said the plaintiffs filed a case in the Administrative Law Court four years ago and it is on hold pending a decision on how to proceed. It should proceed there, he said.

It also has not been decided whether people were overtaxed or are due a refund, Duff said.

"We have not addressed the merits in this case whatsoever," he said.

Georgetown County School Superintendent Randy Dozier, who came for the hearing with board member Elery Little, said the lawsuit is a waste of taxpayer money.

The school district cut its levy to make up for the overcharge, and put new controls on the amount of reserves it keeps, Dozier said.

Duff said the school district doesn't have the $6 million the plaintiffs say was illegally taxed and if the courts find in their favor, "we would have to tax them to pay them."