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Sales Tax Referendum - Why you should vote NO!

Warwick Jones, Editor

The sales tax referendum is only 4 weeks away. The City and County are now heating up their campaigns to yet again convince voters of a need for an increase in the sales tax. This will be the third attempt to raise the tax. The earlier attempts failed. In the case of the first, the tax increase was rejected at the polls, and in the second, because the vote was overturned by the Supreme Court who found fault with the wording of the ballot paper. Hopefully, this is the last time a vote is sought. But we cannot be certain. The Attorney General has questioned the legality of the wording and a legal challenge is very possible if the referendum is successful. And given the tenacity of the Councils, it is possible that a No vote may not deter them for seeking another referendum in 2008.

About 60% of proceeds unallocated
The half cent increase in sales tax is projected to raise $1.3 billion over 25 years. Should the $1.3 billion be raised sooner, the tax will cease. The County has indicated that $1.08 billion will be spent on transport and infrastructure - essentially roads, bridges and transport (CARTA). The balance of $221million will be spent on the acquisition of "greenbelts". The Council has defined a number of bridge and road projects which in aggregate will absorb $625 million. So in fact, it remains at the discretion of Council as to how the balance of $680 million will be spent. Indeed, Council still has the discretion to amend much of the existing list of targeted projects. By law, all of the $1.08 billion will have to be spent on infrastructure and transport projects. No green space has been defined for purchase.

Wording of ballot still uncertain
The Attorney General has indicated that voters should be given a choice as to what they wish to approve. The wording of the referendum bundles everything into one vote, Yes or No. But some voters may wish to vote Yes only for green space. To get what they want, they have to vote for funding of roads and CARTA. In the view of the Attorney General, this could be construed as "bobtailing', getting measures passed on the back of others. We think the Attorney General's view has merit. There should be three separate votes - for funding CARTA, for infrastructure, for green space. But it remains unclear as to whether the ballot wording can be changed at this late stage.

Trust and responsibility is the major issue
Our opposition to the sales tax increase lies primarily with the lack of faith in the local governments to act responsibly. In our view, the record of local government has been less than impressive. In many cases, it has created the problems that it states will be corrected by the higher tax. Further, we feel that the solutions it seeks will in fact compound the problems in future. Dana Beach, President of Coastal Conservation League, described the tax as a "slush fund". This is our view, and the efforts of County to insert "independent bodies" between it and the funds, are essentially cosmetic.

City and Councils are responsible for creating present road congestion
So give us some examples of irresponsible action on the part of local government, you might ask? Let's address the issue of roads and infrastructure. Simply, many of our major roads are not large enough to handle the present volume of traffic. Why is there such traffic? Because there has been a major influx of people into the Charleston and surrounding areas. But was this growth beyond the powers of Councils to control? Certainly not! Have you attended any City or County Council meetings in recent years? If you have you will notice at every meeting there are subdivisions or rezonings allowing more construction. Some projects are small, some are large. But in aggregate, they are substantial. There has been little recognition of the pressure on infrastructure by local government. Mount Pleasant realized too late that things had got out of hand. Over the last decade or so, subdivision grew at a rapid pace and roads were overwhelmed. The present administration of Mount Pleasant decided to cut back on building approvals to a manageable 3% annual growth rate. Its plan was thwarted when the County Council approved the very large Marino Tract subdivision to the north of Mount Pleasant. In effect, Mount Pleasant had to accept a distasteful compromise plan to bring the development within the domain of the town and retain some control.

How much urban sprawl do citizens want?
So the question becomes do you allow construction growth to continue at a virtually unrestrained rate? If so, vote for the sales tax and see Greater Charleston turned to one massive urban area. For by spending on new roads, particularly major roads, you are inviting more destruction of the remaining rural area and further urban sprawl. Many studies have concluded that the alleviation of traffic congestion by the construction of wider, or new roads, eventually becomes self defeating. It simply leads to further subdivisions and sprawl. A vote for the tax will be an invitation to repeat the experience of the last 10 years. But this time it will be worse because it is starting from a much larger base.

Why do we need to fund infrastructure for new developments?
The Mayor of Charleston, when speaking at the County public hearing stated that South Carolina was a favored destination of folk relocating from the North. The higher tax was needed to provide for infrastructure to cater to the tremendous growth that was projected for the coastal regions of the State, and in particularly around Charleston. In effect, he wanted the present residents of Charleston to pony up the funds so other people could come and live here! I have no objection to people coming to Charleston to live. But the process should be controlled and not at the expense of the present citizens. If costs are to be incurred for providing new infrastructure, they should be covered by fees or taxes on the beneficiaries. So if a developer plans a subdivision say, the lots should bear a tax or fee that will go to pay for infrastructure. This seems fair and simple. The tax or fee may also cause the price of the lots to rise, and this in turn may restrain the influx of new residents. But at least the new residents would be bearing the real cost of their relocation.

Many roads are the responsibility of the State
And what about many of the roads? It seems that many of the roads that are to be widened are actually owned and controlled by the State. Why is the County and Cities paying for the upgrading or new construction? Part of the answer is the neglect by the State, lack of State funds, but complicated by the system of grants and matching funds. But the County ought to be leaning more heavily on the State in seeking what it needs, and not drawing on a Sales tax.

What happened to all the other projects?
For the 2002 Sales tax referendum, the County provided a document that listed all of the projects that it proposed to finance with the sales tax. Some of these projects made the 2004 list such as the Cooper River Bridge and the Marcus Clark Expressway. However, a lot did not. In fact, we estimate that projects totaling more $300 million were detailed in the 2002 list but did not make 2004. We don't know the reason. But we are cynical. Could it be that voters are becoming wary of the Council? Could it be that some of the proposed projects were "suspect" and would not warrant the cost? We certainly feel this way about a raft of bridges which were proposed over the railway line running along the Neck in the Cities of Charleston and North Charleston. The cost of these bridges totaled $250 million. And there were others projects as well. So if Council were really honest about its spending plan, it would have added these projects to the designated list for the 2004 referendum. That it didn't, brings into question its integrity in the 2002 referendum.

With council changing, are we being unfair?
The County Council makeup is changing now with voting moving to "single district" as opposed to "at large" previously. There will be some changes certainly and it is unfair to tar the new members of council with the same brush. But at the same time, it is too early to be sure that they will earn our trust. But we would note that they were not on council fighting for the tax and did not feel the possible pain of voter resentment. It will be easy for them, and perhaps for others to assume the tax is permanent. After all, who has been agitating for a reduction in the county sales tax which is presently 1 cent. This level has been assumed to be unalterable. Probably 1.5 cents will come to be treated the same way with time.

Creation of an "independent" committee
Sensing the skepticism of voters, the County is planning to create a body called the Charleston Transport Committee (CTC) Each Councilmember will be entitled to appoint a member of the CTC. The cities of the county will be able to appoint 2 members and 2 members will be appointed for the Northern and Southern extremities of the county. This board, the council believes, will be independent and will have the responsibility of recommending infrastructure projects to the Council. Do we believe it will be independent? Hardly.

Green space - talked about, but nothing much happens
Everybody wants green space, particularly the Mayor of Charleston who has placed the need close to the top of his agenda for many re-election bids. Yet we never seem to end up with any mor green space. Of course we had the Dill tract of some hundreds of acres that was supposed to be green space when left to the Charleston Museum by the Dill sisters. But it got turned into a subdivision with the approval of the City. And there is Ansonborough Field, the 12 acres open site near the Aquarium used by The Wildlife Exposition, Bridge Runners and others, which is now going to be developed by the City. And there is the McLeod Plantation with the best part of 40 acres. Purchase of McLeod was top of the City Planning Department's wish list in 2002. And in 2004 the City is supporting the sale by Historic Charleston Foundation to the School of Building Arts.

And people ask why we are skeptical?

No green space proposals yet
No property has been defined by the County for acquisition. Clearly, the acquisition of green space can be controversial. The question is not asked but it is there; how can we be sure that the councils and cities will act in good faith and that the funds will not become slush for politically related deals? The council has attempted to qualm these fears by pointing to the Parks and Recreation Commission. The Commission will have the responsibility of defining acquisitions of green space and making recommendations to Council. Members of the Commission are appointed by the Council and in the Council's opinion at least, they are independent. We don't share the Council's view. We feel that it, like the CTC, is susceptible to pressure from county and city council members.

And finally CARTA
The issue of CARTA is difficult. We need a public transport system but not like the one we had prior to the cutbacks of a year ago. If the referendum is successful, will the owners - the County and respective Cities - allow CARTA to revert back to the status quo? Or will there be real changes? As before, it comes down to a matter of trust!

CARTA has said that there will be some changes. There will be the purchase of smaller buses and the permanent closure of some routes. We hope that it will do more, particularly in relation to the DASH routes where there seems scope for boosting revenues by catering more to tourists.

We do need some public transport service
Despite the doleful letters that the Post & Courier was publishing earlier this year, and thankfully we have been spared so far in the current promotion, we think the number of people permanently inconvenienced buy the cut backs of bus services is not so large. Many have found other means of traveling to and from work, or undertaking chores that require transport. We have written earlier about anecdotal evidence of folk forming car pools, either based on privately owned cars, or taxi cabs. And more taxi cabs in Charleston are one of the benefits of a cut back in CARTA services. But notwithstanding, we still need a bus service. Maybe it should extend its services to Dorchester and Berkeley Counties. After all, a lot of the people live in those counties, particularly in Summerville and Goose Creek, who commute to work in the City of Charleston

Like most of us in Charleston, we question the need for CARTA when we see these exhaust spewing vehicles barreling along with few passengers. Cursory observations suggest that little has changed over the last year. We suspect that of all issues, that of CARTA will receive the least support in the referendum. After all, most of us have our own transport and never use the bus service. The cost of maintaining it seems very high in relation to the low level of ridership. It is probably because of the public's perception that CARTA has been rolled into roads and infrastructure in this referendum. In the previous referendum, the allocation for CARTA was separate.

However, CARTA is not enough to make us vote YES for an increase in the sales tax while infrastructure and green space are included, and the use of so much of the funds remains undefined.

What circumstances would cause us to vote for a tax increase?
Under what circumstances would we vote for a sales tax increase? When there is clearly an important need and the projects are specifically defined and when a sensible policy to control growth of the county and cities is implemented. In the present sales tax proposal, citizens of Charleston County are asked to approve a $112 million bond issue as well as the sales tax increase. The interest and redemption of the bonds will be paid out of the sales tax proceeds. But attached to this bond issue is a list of projects to be financed by the bond proceeds. There is no blue sky. There are no funds to be borrowed that are for projects that are yet to be determined. But without paying too much attention to the math, these projects could be financed with a half cent sales tax over 4 years.

Of course there could be some problems with this approach. Projects are still bundled and citizens have to vote on all or nothing. And again what scope would there be for the Council to act fast should it wish to acquire some prime green space that comes on to the market? Could the Council take steps to secure the space and raise funds by extending the sales tax in a future referendum, not only for this particular acquisition but for other projects that are deemed necessary? Obviously referendums are expensive and should be held at the same time as other elections which means about every 2 years.

Maybe there are other problems that we can't think of. But we understand that systems like this work in other communities in South Carolina. Why not in Charleston as well?

Enough is enough
Should the referendum be successful, Charleston county residents will be subject to a total 6.5% sales tax - comprising a state tax of 5% and a county tax of 1.5%s. But let's not forget the 2% hospitality tax that citizens of Charleston bear. This is levied on hotels and restaurants and although it may be aimed primarily at tourists, it still hits locals when they choose to dine out. It is even levied on prepared foods in supermarkets. This will take the tax on dining out to 8.5%. Enough is enough!

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