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Taxes: Town urges county to use new property values
By Charles Swenson
The town of Pawleys Island believes reassessment by Georgetown County will bring lower property taxes, and doesn’t want the county to delay the process.
“The last reassessment shifted a substantial burden to Waccamaw and Pawleys Island,” Mayor Bill Otis said. “A new reassessment would swing the other way.”
Georgetown County may delay the process, required every five years under state law, because of the way counties must calculate the tax rate after reassessment, which is part of a tax reform measure passed in 2006.
County Administrator Sel Hemingway estimates the quirk in the law could cost the county $1.6 million in revenue.
Town officials believe property values have fallen since the 2005 reassessment, which was implemented in 2006 because of a computer software problem.
But Hemingway said, “we don’t have a number at this point.”
Once the new values are determined by the assessor’s office, Council Member Glen O’Connell, whose district includes the town, said they may not turn out to be what some Waccamaw Neck property owners expect.
“If you look at the last reassessment, that was before the price peak in the market,” he said.
The new values will be those calculated as of December 2009, which may not prove to be the bottom of the market, O’Connell said.
He and Hemingway both noted that foreclosures and distress sales aren’t counted in determining values for reassessment.
The issue really isn’t property values anyway, Hemingway said.
The tax reform law, known as Act 388, requires that counties base their tax rate in a reassessment year on their prior year’s revenue. But the county only collects about 95 percent of what it bills, Hemingway said.
Since state law requires that tax revenues remain equal before and after reassessment, the county will see an immediate 5 percent drop in revenue. And that will be the benchmark for the years leading up to the next reassessment, Hemingway said.
“Regardless of what the values are, we have to make sure it’s revenue neutral,” he said.
Act 388 limits tax rate increases to the annual rise in the federal Consumer Price Index plus the increase in county population.
“The Consumer Price Index is negative,” O’Connell said. “The population growth is zero.”
Pawleys Island Town Council this week asked Town Attorney David Durant to meet with the county attorney to discuss the issue.
“I think it’s worth looking into,” DuRant said.
The county is already at work to make sure its interpretation of the law is correct, and Hemingway said it’s reasonably certain that it is. There are 11 other counties in the same dilemma.
“The next step is to work with the legislature to change that,” O’Connell said.
There is another option.
Act 388 allows County Council to exceed the cap on the tax rate under certain circumstances, such as when it faces a deficit. It would require a two-thirds majority.
The reassessment situation “probably falls into the category of a deficit,” Hemingway said. “The question is whether council is willing to stand up and raise taxes.”