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County Council, April 29

Potential economic boost from a new air line
Trash collection; a budget session warm up
Warwick Jones

The big news is that Charleston may again be served by a low fare airline. This could lead to hundreds of dollars in savings on individual flights to other major cities. But a subsidy will be required and County Council is looking to provide this by a 5% tax on car rentals.

The story has been well covered by the Post and Courier so we will only summarize.

The Finance Committee voted unanimously to impose the tax. The only issue was whether to insert a “sunset “clause to withdraw the tax should the effort fail to draw a discount airline, or an airline withdraw after setting up. Chairman Pryor successfully argued that the tax, expected to raise $1.5 million a year, would still be needed to continue the efforts to attract a carrier.

A presentation was made by Helen Hill of the Convention and Visitors Bureau. She suggested there would be considerable benefit arising from the introduction of cheaper fares. She said that the benefit to the Charleston community would be:

  • $180 million in fare savings for air travelers

  • Reduced air fare in markets strategically important

  • 200,000 new flyers

  • 120,000 new visitors

  • $84 million in direct visitor spending

  • $139 million in annual economic impact

The tax would be used to finance infrastructure improvements though the Finance Committee was not told, nor did it ask, what these were specifically. The letter to Council from the CVB spoke only of a subsidy.

No mention was made of the name of the airline considering entering the Charleston market and Council member Summey suggested there was more than one. The rationale for the tax was the savings that would be enjoyed by those traveling by air to Charleston. The cost of care rental would be marginally higher but more than offset by the air far savings.

As Council member Thurmond said, it seems a “win – win” situation. The local car rental companies did not agree, according to the Post and Courier story. They said that majority of car rentals are to locals and not to air travelers. Why not tax only those cars picked up at the airport? Reasonable, but then the needed $1.5 million won’t be generated.

North Charleston opts out of trash disposal agreement We did not fully understand it, nor did some Council members. But here’s the gist. Council member Summey reported that North Charleston was opting out of the present arrangement that the County has with the municipalities. It seems under this agreement 50% of the trash collected in the municipalities is sent to the Bees Ferry Dump and 50% sent for disposal outside the County. North Charleston was no longer going to send garbage to Bees Ferry. It was not economically sensible incurring the extra cost related to distance, wear and tear, and inconvenience. Its decision would cost the County an extra $500,000 a year

But we were told that this would not show up in any tax payer bill. The present trash collection/disposal system, with the closure of the incinerator, was much cheaper than last year, the savings being $14 a ton. So the overall bill for the County will be down, but now $500,000 higher a year than previous.

Council member Schweers said it was complicated and did not understand how it worked. Council member Thurmond, who has been uncharacteristically quiet in recent sessions and perhaps preoccupied with his bid for a seat in the Federal legislature, agreed. He wondered why we had a system with such obvious inefficiencies. Now was the opportunity to implement a consolidated plan, he said.

And perhaps consolidation is a good idea but the County is in the middle of deliberations to determine future waste disposal. So such discussion may be premature.

A warm up for 2011 budget sessions
The budget sessions for fiscal 2011 will be with us shortly. As a prelude, staff had been tasked by the Administrator O’Neal to look at enhancing revenue and to ensure that charges and fees recover a portion of the costs of providing the service. As staff noted there was limited opportunity to increase revenues. About 40% of total County revenue was derived for items with no opportunity for change such as sales tax, fines, and intergovernmental sources. About 54% of revenue was derived from items where there was “limited” opportunity for change such as property taxes, EMS fees and Business licenses. What was left equated to 5% of total revenue.

Staff went through the various categories that contributed the 5% of revenue and identified areas where fee recovery was insufficient or where new fees could be imposed. There were many suggestion and generally they were modest. But the suggestion included permits for moving mobile homes and for mobile home dealers, higher fees for building permits, fees for storm water permits, and others.

The proposed changes would raise an estimated $100,000 for the General Fund and $80,000 for other Funds.

Council made no decision last night but obviously, the proposals will be considered in the budget deliberations.

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