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Half-cent sales tax tossed out

State Supreme Court ruling puts brakes on CARTA
County to sell land for first bridge payment

BY ARLIE PORTER
Of The Post and Courier Staff

The S.C. Supreme Court on Monday threw out Charleston County's half percent sales tax election, a decision that officials have said would shut down the area's regional bus system whose future hinged on sales tax funding.

Barring the justices reversing their unanimous decision, buses could stop rolling as soon as two weeks from now.

"This is a major blow for many citizens in Charleston County, particularly those depending on public transportation," County Council Chairman Tim Scott said of the court decision.

"There will be tears of joy and tears of pain flowing in our community. I think those who depend on public transportation will be in absolute pain."

In its decision, the Supreme Court ruled that County Council misled voters into approving passage of the sales tax last November.

The decision drew mixed reactions from the mayors of the county's three largest cities, all of whom sold the sales tax to the public as a way to address some of the area's most vexing and persistent problems: an underfunded public transportation system, traffic congestion and suburban growth gobbling up the countryside.

Over the 25 years it was to be in effect, the tax would have raised $1.3 billion, paying to run the Charleston Area Regional Transportation Authority (CARTA), buy land for parks and preservation, and build new roads and bridges.

Three major road projects were entirely contingent upon the sales tax revenue: the final loop of the Mark Clark Expressway from U.S. Highway 17 across Johns Island to the James Island Connector, the continuation of the Glen McConnell Expressway to Summerville, and widening and other improvements of U.S. Highway 17 in Mount Pleasant.

County Council had also committed $3 million each year for 25 years as the local share of funding for the new Cooper River bridge.

Scott has said that if the sales tax failed, council would have to raise property taxes to cover the bridge funding commitment, the first payment of which is due in January. On Monday, he said council can instead sell surplus property, which he did not identify. County Administrator Roland Windham said the county is creating an inventory of all its property to see what is needed and what is not.

Either way, work on the bridge is not expected to be interrupted.

The same cannot be said for CARTA, which has scrambled for years to find a source of local public funding.

After an attempt to raise vehicle registration fees to pay for buses failed in the 1980s, CARTA officials pinned their hopes on a new Charleston County sales tax in 2000.

Voters rejected the sales tax, which county officials attributed to their failure to specify how the tax money would be spent.

In an attempt to draw support from opponents of the earlier sales tax, council members proposed that besides funding CARTA, a new sales tax would include substantial funding for new road projects and purchase of green space.

After months of heavy lobbying, the sales tax passed last November by a margin of 865 votes out of almost 100,000 cast. The tax would have added half a percentage sales tax to the cost of buying things in the county, adding 5 cents to a $10 purchase, 50 cents to a $100 purchase and $5 to a $1,000 purchase.

Soon after, sales tax opponents challenged the election, claiming that County Council worded the ballot in such a way as to deliberately mislead voters into approving the tax. The ballot instructed voters to vote for the sales tax if they favored "the traffic congestion relief, safe roads and clean water sales tax."

County officials also passed out fliers promoting passage of the tax at polls during the election, opponents claimed.

The local election commission warned that the ballot language was illegal but later ruled that it did not have the authority to change the wording. It also ruled that the flier did not promote the sales tax.

Sales tax opponents appealed to the S.C. Election Commission, which upheld the election by default in a tie vote. The opponents, who include state lawmakers and city council members from North Charleston, Charleston and Mount Pleasant, took their case to the Supreme Court.

In its decision, the court said that the ballot question did not conform with state law and undermined the integrity of the election.

Instead of explaining how the voter could vote for or against the sales tax, the instructions to the voters attributed reasons to vote in favor of the measure: "traffic congestion relief, safe roads, and clean water," the court said.

"The voter instructions here appear calculated to persuade and ultimately mislead voters into voting in favor of the tax by obscuring the fact that a vote for clean water was a vote for (the) increased sales tax," the justices said.

While the court said that its decision on the language renders the questions about the flier moot, it did question whether county officials broke the law by distributing the fliers at polls.

The same rules that prohibit candidates from distributing campaign literature at polls applies to local governments proposing a sales tax, the justices said.

Trent Kernodle, an attorney who represented the sales tax opponents, said that he was not surprised by the Supreme Court decision, given County Council's irresponsible decisions to proceed with the ballot wording despite warnings it was illegal.

"I was delighted in one sense but saddened by another because they had a chance to fix it but didn't," he said.

Among the lessons learned is that when a local government supports a sales tax, the public must watch it closely, Kernodle said.

At a press conference Monday, Scott accepted blame for the botched election. "I think the ultimate responsibility lies within the County Council," he said.

Scott said the county could do nothing; could ask the Supreme Court to reconsider its decision; or could try to pursue yet another half-percent sales tax, although he wasn't sure council was in the mood to try a new sales tax next year. Scott said council members likely would discuss the issue Sept. 4.

With this much at stake, the council would be doing a disservice to its constituents if it did not put a sales tax question back on the ballot next year, said Charleston Mayor Joseph P. Riley Jr.

"We cannot give up on this. This is too important to every citizen of our county. It is so critically important to our citizens and our quality of life," said Riley, who described himself as shocked and disappointed by the court decision.

Riley and Mount Pleasant Mayor Harry Hallman urged council to ask the Supreme Court to reconsider its decision.

Short of a reversal, which is unlikely, the bus system could come to a halt in two weeks, and Riley said there is no backup plan to rescue the agency.

Patterson Smith, chairman of the CARTA board, said that CARTA has no money to pay its contractors and is about $7 million in debt, including a loan it secured from a local bank to keep operating pending the Supreme Court decision.

"This is serious. This is like losing a member of the family," Smith said.

Mount Pleasant Mayor Harry Hallman, who supported the sales tax for the road improvements it would have funded, said he was disappointed with the decision but that some good could come of it.

"We have a lot at stake, but it's not the end of the road. We'll just have to work harder next time," he said.

North Charleston Mayor Keith Summey, who supported the sales tax primarily because of CARTA and road funding, said the sales tax would have helped ease traffic congestion on city streets, particularly around Ashley Phosphate Road.

"You have got to find better ways to move people around," he said. "The population is going to continue to grow."

ON THE WEB

The full S.C. Supreme Court ruling is available at:

http://www.judicial.state.sc.us/opinions/displayOpinionPF.cfm?caseNo=25707

RULING EXCERPTS

"While we do not fault County Council for advocating the passage of this tax before election day, the fundamental integrity of the election process requires that the voters be presented with an objectively phrased choice on election day. ... Accordingly, we find that the election results in this case must be voided."

"The language actually placed on the ballot in this case differed from the required language in three ways. First, instead of listing a dollar amount for the cost of each project, the Ballot question... listed the percentage... Second, the two main projects were not numbered... Third, and, most importantly, the title and instructions to the voters appeared to advocate passage of the tax."

"We find the advocacy language within the Ballot, however, to be more troublesome."

"In our opinion, the Ballot used here does not conform with this statutorily mandated format, and the non-compliance is so substantial that it affects the fundamental integrity of the election."

"The voter instructions here appear calculated to persuade and ultimately mislead voters into voting in favor of the tax by obscuring the fact that a vote for clean water was a vote for increased sales tax."

"We have consistently recognized that perfect compliance with the numerous statutes regulating elections is unlikely, and have been loathe to nullify an election based on minor violations of technical requirements. This court will overturn the results of an election, however, when mandatory statutory provisions have been violated and those violations interfere with a full and fair expression of the voter's choice."

"In (George v. Municipal Election Commission of City of Charleston), the Court made it clear that total disregard of a statute cannot be treated as an irregularity, but must be held to be a cause for declaring the election void and illegal."

"Resolution of the specific question presented to us (regarding the county's election day handout) is unnecessary as we have determined that the election should be voided based on the Ballot language alone."

THE PROBLEMATIC LANGUAGE

The S.C. Supreme Court overturned Charleston County's half-cent sales tax referendum because, among other reasons, "the title and instructions to the voters appeared to advocate passage of the tax."

Here is the question:

The half-cent sales tax referendum (all Charleston County voters)

QUESTION 1

Traffic Congestion relief, safe roads and clean water for Charleston

I approve a special sales and use tax in the amount of one-half percent to be imposed in Charleston County for not more than 25 years, or until a total of $1,303,360,000 in resulting revenue has been collected, whichever occurs first. The spending program shall have an administrative cost of no more than five (5) percent, and all spending shall be subject to an annual independent audit to be made available to the public. The sales tax proceeds will fund the following projects for the following purposes:

Improving roads and road safety throughout Charleston County by building, repairing and maintaining highways, streets, bridges, sidewalks, curbs, gutters, drainage systems and other road amenities where required, including, but not limited to a new Cooper River Bridge; reducing traffic congestion; discouraging over-development; preventing unnecessary highway and road expenses; and improving air quality by funding and improving mass transit projects operated by Charleston County and other governmental entities serving Charleston County, including, but not limited to, the Charleston Area Regional Transportation Authority and Berkeley-Charleston-Dorchester Rural Transportation Management Association (eighty-three percent of total revenue raised).

Protecting farms, forestland, and open space from over-development; safeguarding rivers, creeks, bays, drinking water and groundwater; providing new parks; and improving air quality by purchasing and improving parklands and otherwise preserving green space (seventeen percent of total revenue raised).

Instruction to Voters: All qualified electors desiring to vote in favor of the traffic congestion relief, safe roads, and clean water sales tax for the stated purposes shall vote "YES."

All qualified electors opposed to the traffic congestion relief, safe roads, and clean water sales tax for the stated purposes shall vote "NO."


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