Tuesday, March 19, 2013
Dorchester County Council is getting more serious about a local option sales tax.
The appeal? It really and truly isn’t a tax increase, say council members. Really.
It’s a tax shift.
That’s because most, if not all, of the tax would go toward lowering property taxes.
And because Berkeley and Charleston both have the local option sales tax, every time you shop at Home Depot or Target you’re paying the tax and lowering property taxes in Dorchester’s neighbor counties, council members said.
“It’s like putting a deck on your neighbor’s house,” said County Auditor J.J. Messervy, who was tasked with presenting the ins and outs of the tax to council during a budget workshop Thursday.
By state law, 71 percent of the tax must go toward property tax relief. The remaining 29 percent can go toward property tax relief or capital projects.
The law also dictates how the tax revenues are split between the county and its municipalities.
Further, 5 percent of anything collected over $5 million goes into a state fund, which is then distributed to low-collection counties because any county that opts for the tax is guaranteed at least $2 million in revenues.
Dorchester County would likely be in the “donor” category.
Messervy said the estimates for Dorchester County were last calculated several years ago, so the figures he presented council were used for discussion only.
Nonetheless, the old figures show Dorchester collecting about $9 million through the local option sales tax.
Figuring how much each property owner would benefit gets more complicated. First, the credits are recalculated each year as the tax revenues and the assessed value in the county fluctuate.
Secondly, property owners in some of the smaller municipalities would get more benefit than property owners in the larger municipalities, where the credit would have to be distributed over a greater tax base.
But those old estimates show that, for every $100,000 of value, each piece of property in the county would see about $50 in property tax rolled back.
Property in Summerville and North Charleston could get an additional $70 or so rolled back per $100,000.
The credit is based on assessed value, and the amount is the same whether the property is residential, commercial or industrial.
Ridgeville would be a big winner. With the prison boosting its population – one of the variables in how much money each municipality gets – and a low assessed value for property in town, properties could get a credit of $300 per $100,000 in value.
Councilman Jay Byars said North Charleston Mayor Keith Summey has contrasted his constituents who live in Charleston against those who live in Dorchester.
North Charlestonians in Charleston get the property tax credit; North Charlestonians in Dorchester don’t.
The same contrast can be made between Summervillians who live in Berkeley or Charleston counties and those who live in Dorchester County.
The county might underestimate the credit for the first few years as the program gets under way, Messervy said. However, it would have to go back and return that money to taxpayers once final figures are in.
“There’s no windfall that you can take under any circumstances,” he said.
If county council decides to proceed, the final decision will be up to voters.
The question would go on the November ballot, with the exact usage of the tax spelled out.