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County Finance Committee Jun 17.

No surprises with Sales Tax and CARTA Budget approved. Reassessment cap decision deferred
We speak with Howard Chapman of CARTA
Warwick Jones, standing in for Shawn Keller who is on military duty

With the CARTA 2005 budget, the Sales Tax referendum and the Reassessment cap on the Committee's agenda, we were prepared for an interesting meeting. Considering the TV crews present, others were obviously expecting some excitement. Well, it all was a bit of a yawn. The CARTA budget was accepted without discussion, so was the Sales Tax referendum. And a decision on the Reassessment cap was deferred.

Reassesment complex
The committee went into executive session to consider likely action in relation to reassessment caps for the County and decided to defer any decision. As one member pointed out, the county was in an impossible situation presently. It had attempted to introduce a 15% cap on property assessments at the time of the last assessment and it was blocked by the courts. But there are appeals in process with a decision still to be made by the S.C. Supreme Court. Now the State is introducing a 20% cap but it remains to be seen whether it will ever pass into law. So when in doubt, do nothing!

Sales tax ordinance straight forward
The Ordinance for the "half cent sales tax" in most respects, looks very much like the last and its introduction is essentially a formality. The Ordinance also directs how the wording should appear on the ballot, obviously a reaction to the Supreme Court decision and its criticism of wording and other things in relation to the previous referendum.

Just in case you have forgotten, the referendum will be in November, and if carried, and would increase the County sales tax from 1% to 1.5%. Added to the State sales tax, the total sales tax would amount to 6.5%. The new half cent sales tax will terminate in 2030, or when $1.303 billion is raised, whatever occurs first. Collection will begin in May 2005 and the proceeds would be split as follows.
• $1.081 billion for "highways, roads, streets, bridges, and other transportation-related projects, and drainage facilities related thereto, and mass transport systems operated by Charleston County or jointly operated by the county and other governmental entities".
• $0.22 billion for "greenbelts" (We think they meant green space though $220 million would probably buy a "belt".)
The referendum also seeks the approval to raise $113 million in bonds, which will be repaid from the proceeds of the Sales tax increase. The proceeds from the bonds will be used as follows:
• $25 million to begin the right of way acquisition and engineering processes for the widening and improvement of Johnnie Dodds Blvd from the Arthur Ravenel Jr. Bridge to the I 526 overpass (Mt.Pleasant)
• $7 million for Glen McConnell Parkway/Bees Ferry Road intersection improvements.
• $10 million for road improvements on James Island.
• $6 million for a US highway 17 access ramp onto Highway 61 connector near Wesley Drive.
• $29 million for acquisition and construction of a road way connecting Ashley Phosphate Road and the Palmetto Parkway through Spartan Blvd.
• $36 million for greenbelts

CARTA projecting an operating deficit of only $407,000 in Fiscal 2005 but, and its a big but.
CARTA's fiscal 2005 budget was before the Committee last night for approval. It got it without comment. Most of the cities who hold equity in CARTA have approved the budget. It comes before Charleston City Council next month and most likely will be approved.

Considering the hemorrhaging of the past, the projected $407,000 deficit on operations seems modest, Hey look, the City of Charleston's operating budget is near $100 million and the City is only one of the shareholders in CARTA. In terms of public transport, the loss projected is not great Of course, the loss has to be put into perspective. CARTA has cut out its most profitable routes, and service is well down on 12 months ago. Indeed, in terms of "Farebox revenue" CARTA is projecting about $901,000, about 38% of the amount that it projected for 2004. So this is a good indication as to how much services have been cut.

Now here is the "but"! The budget for Fiscal 2005 assumes revenue of $6.3 million. But in this revenue is an amount of $2.25 million to come from the new sales tax. So if everything else remains the same and the referendum fails to approve the higher sales tax, the operating budget deficit will swell from $407,000 to about $2.66 million. Now that a deficit that gets your attention. And it also begs the question as to whether there is a Plan B. Remember the sales tax was rejected by voters everywhere in the County with the exception of North Charleston. The voters in North Charleston provided the edge that would have allowed the referendum to approve the tax if it were not for the Supreme Court decision. The mayor of Charleston City is on record as saying that there is no Plan B.

No Capital to be spent on buses
The budget for Fiscal 2005 shows a figure for capital spending of $3.34 million, financed almost totally by Federal grants and to a lesser extent by State Grants. But of the total amount, virtually none is to be directed to the bus service. All of it is going to The Intermodal Facilty (IF) and Futrex.

We were surprised at the spending proposed in the Fiscal 2005 budget. I suppose we expected something to be spent on equipment but of course, if one reflects on the fact that many buses are "mothballed" presently, why would you need to buy more?

What are IF and Futrex you might ask? Howard Chapman, executive director of CARTA was in the audience at the meeting and we took advantage of the long executive session relating to the Reassessment Cap, to discuss CARTA, and in particular the IF and Futrex.

(More on the discussion with Howard Chapman will be posted later today as a seperate story W.J.)