Nick Kremydas, senior vice president of the S.C. Association of Realtors, got a cold shoulder Tuesday from the Greater Beaufort Chamber of Commerce Government Affairs Committee when he criticized legislation that would allow a real estate transfer fee to be charged in Beaufort County.
The transfer fees have enjoyed strong support in Beaufort County for years. Unfortunately, the town of Hilton Head Island has been the only municipality in South Carolina to maintain such a fee. All Beaufort County municipalities once charged the fee, but the legislature changed the rules.
Last year, Rep. Bill Herbkersman, R-Bluffton, introduced legislation that would allow all municipalities that had such a fee before 1991 to reinstate the fee. Because of the language, the fee would be isolated to Beaufort County only. But it is a fee that could help many local governments throughout the state. It is one of several revenue generators that should have been in use since the institution of home rule in 1976.
The Home Rule Act of 1976 was designed to move control of local government away from the Statehouse in Columbia and place it as close as possible to the people. The men and women who drafted the legislation saw a need for grass-roots decision-making, but forgot to give local governments control of several areas, including the ability to implement certain taxes.
Local governments want the county's Legislative Delegation to work for a law that would allow local governments to establish a 0.25 percent real estate transfer fee, a form of tax, to be imposed when property changes hands.
At least three years ago, Beaufort County elected officials began a push to gain more of the financial freedom promised when the S.C. General Assembly approved home rule. In 2000, Hilton Head Island officials and members of the County Council discussed the need to gain authority for other municipalities and the county to charge a real estate transfer fee that could be kept for local use.
The county and Beaufort, Port Royal and Hilton Head Island collected the fee until the S.C. Supreme Court ruled in 1987 that transfer fee revenue had to go back to the state. Hilton Head is the only government in South Carolina that kept the fee; instead of giving up, the municipality fought the ruling in the legislature and the S.C. Supreme Court. Today it still has state-aid to subdivisions and raises about $3 million annually through the real estate transfer fee.
Hilton Head's transfer fee supports the town's land-buying program, while Beaufort County residents approved in the 2000 general election a $40 million referendum to support buying land to preserve open space.
Many see the real estate transfer fee as the epitome of home rule, allowing local governments to spend the money where residents see a need. A point of contention between local governments and the legislature has the purpose for which the money is to be raised. Former lawmakers say the state may look more favorably on the fee if local governments use the money for infrastructure.
In Beaufort County, where voters not only have approved land-buying funds but also spent money to improve major highways, the money could be spent for open space, highways or bicycle and jogging paths.
Local government knows where the priorities are. It just needs the authority for a permanent funding mechanism. The mechanism may not be useful in all counties, but the state's fast-growing counties certainly could use it for necessities.
The chamber committee deserves kudos for sending the S.C. Association of Realtors representatives packing with the correct answer. Lawmakers also should listen to this group.