The Price of Liberty is Eternal Vigilance

The Watch


Individual Articles

A closer look at the City Budget

Tax burden shifting from property owners to businesses and consumers
Generous handouts to "charities"
Marc Knapp and Warwick Jones

A draft of the 2007 City budget was presented to Council at its last meeting. It was a long document and short of explanation though the Mayor noted the highlights in an accompanying speech. Most of the City's spending and costs are contained within the General Fund, and Enterprise Fund. Summaries of both are shown at the end of the report. Council plans to discuss the budget at its meeting on Tuesday, December 12.

General Fund - Property Taxes inexplicably projected to fall but everything else up

Property taxes are projected to fall in 2007. Considering the addition to housing stock, this seems surprising. But it may be explained by a reduction in motor vehicle and boat taxes. These are not broken out in the Budget figures. Also noticeable is the projected big increase in revenue derived by the City from Daniel Island from taxes and for fees in lieu of taxes, whatever these might be. Daniel Island's contribution will equal about 14% of all property taxes in 2007, up from 10% 2 years ago. We have sought information about the fall in taxes in 2007 but our calls so far have not been returned.

As the Mayor said, property taxes as a percent of revenue contribution are declining. You can see from the following chart how the business users and consumers are being socked with license and franchise fees. Even the police are joining the effort and more strenuously collecting fines or is the offending class growing larger? For revenue sources Download file

No surprises on Cost Side of General Fund

There were no surprises on the cost side. Certainly there were some big increases projected for 2007 but they were all explainable. Employee benefits are projected to jump sharply but this largely reflects the cost of the new health care plan mentioned by the Mayor at the last Council meeting. Sharp increase in costs of Engineering and Information Systems are also explainable. However, there were some minor costs that seem unusual such as those relating to Tennis and the James Island Recreational Center.

....but we are not comfortable with Assistance Programs

The Assistance Programs represents the distribution of funds to worthy and charitable causes. But we would like to be sure that they are the only type of causes that receive handouts. Some of the names on the list are recognizable to us as major contributors to charitable work in the community. Many names are not. We hope that Council members critically assess this list as it has the considerable potential to be a vehicle for gratuitous handouts.

We also note that the County has a similar list which is called Contributions to Outside Agencies. It was severely criticized about some of the handouts made, and in consequence, revised its policy to ensure that all recipients were recognized charities. The change occurred even though the Council publicly disclosed the list, and contributions were discussed at Council meetings. We have not heard a similar discussion at City Council meetings but the Council might do will to adopt a policy similar to that of the County.

Viewers can see the list below of beneficiaries over the last 3 years Download file

Enterprise Fund - Parking revenues are important for the City

The Enterprise Fund budget again highlights the importance of parking revenues to the City. The table following gives a summary though we are unsure whether it gives a true measure of the net contribution to City revenues. The garages were financed to some degree with bonds. Interest and amortization are not shown under the Parking category in the Fund breakdown.

Citizens may gripe about the high cost of parking in the City but the $6.8 million return projected for 2007 is probably only a few percent on the replacement value of the garages and facilities. If a commercial return were sought, parking fees would be much higher we suspect. To see Parking revenue, Download file

No unusual items

We don't see anything unusual about the other Enterprise Fund items. Certainly there are items of interest such as the strong growth of revenues from the Visitors Center, the Gaillard Auditorium and the Ballpark. We assume that the growth reflects greater patronage. Revenue and costs of the municipal golf course also seem to be steadily rising and a "break even" position is projected to be maintained>

To see Revenue and Expenses of General Fund Download file

To see Revenue and Expenses of Enterprise Funds Download file