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Sales tax: Spending plan gets cool reception from POA council

By Jackie R. Broach
Coastal Observer

“What’s in it for me?”

That’s the question some residents asked this week when Georgetown County officials gave a presentation on a proposed 1-cent capital projects sales tax.

The tax would help fund projects throughout the county that would make it “more livable” for residents and help tourism and economic development. Those projects include road improvements throughout the county, dredging of Winyah Bay and at Murrells Inlet, a new Waccamaw library and recreation projects.

Yet a vocal component of the 40 or so who heard the presentation, given at a meeting of the Waccamaw Neck Council of Property Owners Associations, wasn’t sold on the idea. Those who support the tax were mostly silent.

It’s all well and good if people in the western part of the county can save on their home insurance premiums as a result of work completed with proceeds from the tax, Peter Horn said. Construction of 10 fire department substations that would lower premiums for an estimated 10 percent of the county’s population are on the project list.

But Horn lives in the Hidden Oaks neighborhood in Litchfield and that doesn’t benefit him. The Waccamaw Neck already bears a large part of the county tax burden, he added.

He doesn’t have a problem paying the sales tax, which would be in place for eight years under the proposal. However, he wants to get some return on the investment, he said, such as lower property taxes “or something of that nature.”

“That’s all we’re interested in personally,” he said.

County Council has said it will consider revoking the county’s impact fees on new construction if the sales tax passes. The committee that drafted the sales tax plan will make that part of its recommendation to council when the tax comes up for discussion next month.

Implementation of the sales tax could potentially impact property taxes in the future, Dan Stacy, the committee chairman, said. If the tax doesn’t pass, a number of the projects on the list will be completed with other funds, including general obligation bonds, under the county’s capital improvement plan. If special purpose bonds are issued now instead of using general obligation bonds later, “it relieves the pressure off the property tax system,” Stacy explained.

“I can’t promise it will be dollar for dollar or that property taxes won’t go up,” he said. But the potential is there.

Just the fact that the sales tax would allow the county to borrow money and start building projects now, instead of waiting for them to come up in the capital improvement plan years down the road would mean a cost savings because interest rates and the cost of construction are cheaper now, Stacy said, answering a question from Nancy Bracken of North Litchfield.

Several people sought assurances the tax would not be allowed to remain in place beyond the eight-year term approved. State law prevents that from happening, County Administrator Sel Hemingway said. If approved, collection of the tax would begin May 1, 2013 and stop April 30, 2021. For the tax to continue beyond that, there would have to be another committee, another project list and another referendum.

Revenue from the tax can only be used for projects on the list approved by voters, he said in response to another question.

There were also concerns about what items would be subject to the sales tax. It would not apply to items the state doesn’t charge sales tax for, including food and prescription medicine.

Bert Cassels of Heritage Plantation suggested scaling back the tax to four years instead of eight and having another referendum if it needs to go beyond that.

Linda Caswell, who lives in the River Club, wanted to know why recreation projects were on the list. “Why aren’t we focusing on things we absolutely need?” she asked.

“People don’t move here because of ballparks,” said Sice Durling, a River Club resident who also blasted the county for implementing impact fees in the first place.

County officials explained about Visions, the citizen-driven effort that evolved into the capital improvement plan and the recreation projects that made there way onto the sales tax list. Visions clearly showed that, for many residents, recreation projects are viewed as a need.

The new facilities, including a tennis complex under construction in Litchfield and ball fields in Georgetown, also serve as economic drivers. Tournaments are already being lined up at new facilities and will bring visitors to the area, benefitting businesses.

Regardless of what’s on the project list, now isn’t the time for a new tax, several in the audience said.

“Everybody knows in this economy people are suffering,” said Judy Clarke, who heads the Georgetown County Republican Women’s Club. A 1-cent tax “may not seem like a lot,” but it could be more than some families can handle right now, she said. “Who came up with the idea to put this on a referendum now, when we should be concerned with not raising taxes?”

Visions was started long before the recent recession, said Marla Hamby, a Pawleys Island area resident and member of a tea party group in Horry County. “It’s just foolish to even entertain raising taxes” right now, she said.

The sales tax is an alternative financing device and “my perception is it’s for the most part revenue neutral,” said Council Member Jerry Oakley. Also, the projects the tax would fund, and others in the capital improvement plan, are primarily economic development initiatives. That includes dredging in Murrells Inlet.

Plans call for spending $1.8 million on preparation of a spoils site for dredging in the inlet and $5.5 million for dredging of Winyah Bay. The inlet is used principally for recreational boating, so dredging there will benefit the county’s tourist economy, which “keeps our taxes one of the lowest in the state,” Oakley said.

If dredging is so important to the county, Tom Winslow, a candidate in state House District 103 , said, why wasn’t it at the top of the committee’s priority list? Road improvements and fire infrastructure occupied the first four spots on the list, followed by libraries and a recreation center. Dredging projects came in at nine and 10.

The committee was required by law to rank projects, Stacy said, but he doesn’t put much importance behind the ranking system as all 20 projects on the list should be completed if the tax is passed. However, if residents want to see dredging ranked higher, that’s easy enough to remedy, he said.

Most of the comments at the Monday meeting were not in favor of the tax, but that doesn’t mean everyone in the audience opposed it. Roz Breit, one of several members of the Friends of the Waccamaw Library who were in attendance, was quiet during the meeting. But said after that she doesn’t mind paying a 1-cent tax to help improve the county.

“The livability is very important. It helps all of us to have these facilities and to make it a first-class community,” she said.

She compared it to fees she pays at Heritage Plantation, where she lives. She doesn’t use all the amenities those fees cover, but “I pay gladly because it’s a community,” she said. “Well, Pawleys Island is a community and I want us to have an outstanding library. I want us to have outstanding recreational facilities for all of us and when my grandchildren come I want to have a nice park to take them to if I want, and I’m willing to pay for it.”

The meeting was the first time county officials had given a presentation on the tax outside council chambers. It was “probably a little premature,” Hemingway said. Oakley agreed.

“At this point, council has not even seen a final prioritized list of proposed projects from the commission. Until the list is finalized, a determination of the extent to which the overall proposal is ‘revenue neutral’ could not be done with any acceptable level of accuracy,” Oakley said.

The committee finished its draft of the projects list last week, but it won’t go to council until next month.

“This is not to imply anything either way, but also, to this point, council has not acted at all on the proposal,” Oakley added. “All council has done ... is authorize a commission to develop a proposed ballot proposition. When the proposal is presented to council for consideration ... council can only send it to the voters, or let the proposal die.”

Tom Stickler, president of the Hagley Estates Property Owners Association, said the meeting was interesting with different components of the public on hand.

Stickler hasn’t formed an opinion on the tax, but he said he sees the difficulty in the job that was given to the committee.

“They have to offer something to everybody,” he said. “I sensed a little bit of resentment on the count of some people in the sense of, ‘well, I’m paying taxes and somebody else is reaping the benefit.’ ”

But some might benefit more than they realize, he pointed out, noting more meeting space is part of the library plan. The council of POAs is one of many groups that meets at the library.

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