Through no fault of its own, the Charleston County School District may have to come up with an extra $6 million to help pay an estimated $11 million refund due taxpayers who paid higher taxes than they should have due to an illegal 2001 reassessment cap. While it would be the hardest hit, the school district is just one of the local governments slated to come up with a portion of the tax refund. In the school board's case, that would mean a tax increase. Since Charleston County Council is solely responsible for the illegal cap, it should do handstands if necessary to prevent that school tax hike from happening.
There are members of council who recognize the illegal cap is their responsibility and are ready to shoulder the total refund burden. That's certainly the view of a former chairman, Tim Scott, who tells us that council is awaiting a legal decision on whether the county can do just that.
Reportedly, the legal concern is whether council can pay the total tab and still comply with a state Supreme Court decision, which stipulates that council follow the standard refund procedure. That procedure involves apportioning the cost of tax refunds among the local governments that got the original tax. But we'd be willing to bet that the high court didn't really anticipate that local governments who actually fought council's decision to impose the cap would wind up paying for council's mistake. It should be noted that both school officials and the city of North Charleston protested the concept of a reassessment cap from the outset.
Council first imposed a local option, 15 percent reassessment cap, which the high court ultimately ruled illegal because it went beyond the authority of state law by giving the cap only to owner-occupied dwellings. That decision ultimately resulted in those whose homes hadn't appreciated substantially and those with second homes and commercial properties paying more than they would have without the cap.
Council subsequently decided to impose a countywide cap, which also met with strong objections from school officials, and currently is being challenged as unconstitutional before the Supreme Court by the city of North Charleston. Fortunately, the lawsuit put the countywide cap on hold. Unfortunately, the state Legislature tried during the last session to impose a 20 percent statewide cap. That bill still sits on the governor's desk and should be vetoed. In view of the constitutional requirement that property be assessed for tax purposes at fair market value, no cap is going to meet the legal test without a constitutional amendment.
Meanwhile, County Council has dragged its feet on the refund due property owners from the 2001 local option cap. The county may be able to finance the total refund with the proceeds of the sale of a parking garage.
We're told there is at least a possibility that council could send the other local governments a bill for their share of the tax refund, as mandated by the law, and then quickly reimburse those governments. There simply has to be a legal way for council to do the right thing.
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