COLUMBIA, S.C. (WIS) – The consequences of a recent South Carolina State Supreme Court ruling are playing out this week in the Midlands.
The Richland County Council and the Lee County Council will be discussing the future of their “user fees” in meetings this week after the state’s highest court ruled similar fees in Greenville County are invalid.
On June 30, the state supreme court found Greenville’s fees were actually taxes.
State law requires most taxes be approved by the legislature, which Greenville’s were not. As a result, the fees were invalidated.
In a concurring opinion, Justice John Kittredge wrote:
“Local governments, for obvious reasons, want to avoid calling a tax a tax. I am hopeful that today’s decision will deter the politically expedient penchant for imposing taxes disguised as ‘service or user fees.’ I believe today’s decision sends a clear message that the courts will not uphold taxes masquerading as ‘service or user fees.’ Going forward, courts will carefully scrutinize so-called ‘service or user fees’ to ensure compliance with section 6-1-300(6).”
In the immediate aftermath, the Kershaw County Council held a meeting to discuss the implications.
On Tuesday, July 13, both the Richland County Council and Lee County Council will follow suit.
The agenda for the Richland County meeting reads Acting County Attorney Elizeabeth McLean will report on the future of the county’s road maintenance fee in the aftermath of the ruling in executive session.
Residents are charged the fee ($20) for motor vehicle licenses. County budget documents estimate the fee will bring in more than $12 million over FY 2022 and FY 2023.
County Administrator Leonardo Brown said McLean will give the council an update and potential council actions will be based off her report.
County chair Paul Livingston has not returned a request for comment.
The Lee County Council is scheduled to meet Tuesday morning, and county administrator Alan Watkins said he would be giving a rundown of the ruling and its implications to council members.
Lee County has a road maintenance fee which budget documents state is expected to bring in $221,000 over FY 2022.
Watkins said there is concern other public safety fees for the fire service will be impacted, as well, ballooning the impact for Lee County to more than $400,000.
“These services — road maintenance and government safety fee — these go to the heart of government services,” he said.
Watkins said the timing of the ruling has made responding more challenging, with it coming after the FY 2022 budget was approved and immediately before the July 4 holiday.
He said if the fees are invalidated, the option of raising property taxes will likely be used to replace revenue.
“These are not services (where) we can do them or not do them,” he said. “We’ve got to maintain the roads and we’ve got to provide fire safety to our citizens. It’ll pretty much be an option of where do we get that money from if the fees are not available and ad valorem taxes would probably be the recourse we’d have to look at.”
In an interview earlier in July, S.C. Association of Counties Executive Director Tim Winslow gave a similar analysis for counties statewide.
“What you might find is higher property taxes in some counties to offset the difference of the elimination of these fees. In other counties what you’re going to see is less services,” he said. “You’re going to see roads that are already deteriorating, probably deteriorating further because there will be no mechanism for, frankly, funding the maintenance of the roads.”
Winslow and Watkins said action from the general assembly to approve the fees would solve the problem. S.C. Speaker of the House Jay Lucas’ office declined to comment, and Senate Majority Leader Shane Massey has not yet returned a request for comment.
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