The South Carolina Supreme Court on Wednesday overturned two measures Greenville County had used to increase its highway maintenance costs and establish a telecommunications valuation.
The court found that the $ 25 annual fee on registered vehicles and the $ 14.95 annual telecommunications fee charged to county property owners are illegal taxes.
The financial implications of the decision remained unclear on Wednesday afternoon, but they can range from nearly $ 7 million to $ 16 million in lost revenue each year.
“We are evaluating the impact,” county spokesperson Bob Mihalic said.
It’s also possible that the county is spending millions on taxpayer refunds.
“Certainly the taxpayers are going to have to be reimbursed,” said Councilor Joe Dill.
The county imposed an annual fee of $ 15 on vehicles in 1993 to pay for road maintenance. The county council increased that fee to $ 25 in 2017, the same year the telecommunications fee was approved to improve the county’s public safety communications network.
Three Greenville County Republican lawmakers – State Representatives Mike Burns and Garry Smith and State Senator Dwight Loftis – have challenged the legality of the county’s vehicle and telecommunications charges.
“If it looks like a tax and it acts like a tax, it’s a tax,” said Smith, chairman of the county legislative delegation. He joined Dill in demanding taxpayer refunds.
Road maintenance costs amount to almost $ 12.7 million per year, of which at least $ 3.5 million comes from the increase approved in 2017. Telecommunications costs bring in nearly $ 3.3 million. million dollars, according to county budget records.
“It’s not something we can’t take care of,” County Council Chairman Willis Meadows said. “I don’t think it’s going to do as much damage.”
City Councilor Butch Kirven, who was president when the vehicle tax hike and the telecommunications assessment were approved in 2017, said replacing the revenue wiped out by Wednesday’s decision could lead to an increase in l property tax – something the county council has avoided for more than two decades.
Kirven also said that providing taxpayer refunds “is the right thing to do.” He said the money for the repayments may have to come from the county’s $ 55 million savings account, known as the fund balance.
“We’re pretty resourceful, I think we’ll get around this problem,” Kirven said. “The downside risk is that we have, for lack of a better word, they will get some money but they are living with poor quality infrastructure and maybe not as good as the public safety they would like for. everyone. But I don’t ‘I don’t think it’s gonna get to that. I think we’re going, we’re going to work through this. “
Decision could affect other parts of South Carolina
While Wednesday’s ruling specifically affects Greenville County, the ruling may also be statewide.
“This Court has received in recent years an increasing number of challenges to so-called ‘service or usage charges’,” Justice John W. Kittredge wrote in an opinion. “Local governments, for obvious reasons, want to avoid calling a tax a tax.
“I hope today’s decision will deter the politically expedient inclination to impose taxes disguised as ‘service or user fees.’ I think today’s decision sends a clear message that the courts will not keep taxes disguised as a “service or usage charge”. ”
Court rejects county arguments justifying costs
Meadows, Dill and County Councilor Mike Barnes initially joined Burns, Smith, Loftis and State Representative Bill Chumley in an attempt to reverse the increase in Greenville County’s road and telecommunications maintenance costs.
Barnes, Dill and Meadows were later removed from the case because board members cannot sue the entity they serve for. Chumley was also removed from the lawsuit because he does not live in Greenville County.
A circuit court judge upheld the charges in 2018, but his ruling was overturned by the Supreme Court on Wednesday.
The judges rejected the county legal team’s arguments that Greenville County’s road maintenance fees provide a unique benefit to county taxpayers.
“Every driver on any road in Greenville County – whether their vehicles are licensed in Greenville County, Spartanburg County, or any other state – benefits from the fact that funds are” specifically allocated to maintenance. roads, ”Judge John Cannon Few wrote in his ruling.
The court also determined that the county had not backed its claim that telecom charges would increase values.
“I’m happy with the way the lawsuit has turned out because I think it’s the right decision,” Meadows said.
Kirk Brown covers government, growth and politics for The Greenville News. Contact him at [email protected] or on Twitter @KirkBrown_AIM. Please subscribe to The Greenville News by visiting greenvillenews.com/subscribe.