Property Taxes and James Island

I asked Peggy Moseley, Charleston County's Auditor, to find out how much a mil of property tax would generate for the Town of James Island.   The assistant auditor answered the question, and it is approximately $84,000.

I have no plan to propose any municipal property tax for the Town of James Island, but I thought we should know.     I also requested a list of the mailing addresses of all of the property taxpayers in the Town of James Island along with the amount they paid the James Island Public Service District.    That list has not materialized yet, but I am still hopeful that we will receive it.   The purpose of such a list is to determine who will receive how much property tax rebate using the local option sales tax funds.   I would very much like to send those rebates out for this year as soon as possible, as well as the amount of the rebate that was held back over the last three years.

Now, I would like to share some hard realities about property taxes in the Town of James Island.    It will help if you will find your tax bill.   It can be for your house or your car.     The way property tax works is that your property is appraised--its value is estimated.   Then the property is assessed.   The assessment rates are not the same for all classes of property.   For example, owner-occupied residences are assessed at 4% of appraised value.    If you house is appraised at $100,000, then the assessment is $4,000.    A mil is 1/10 of a percent.    And so, a mil of property tax on a $100,000 home is $4 per year.

While the Town of James Island has no millage, those of us living in the Town pay property tax to the James Island Public Service District.   The services provided by the James Island Public Service district are services provided by many towns and cities--fire protection, garbage and trash pick up, and wastewater.    We all receive sewer bills from the JISPD, but our JIPSD property taxes are what pays for the James Island Fire Department and our twice weekly garbage pickup.  

The millage for the James Island P.S.D. is 53.4 for current operations and 4.1 for bonds.    That adds up to 57.5.    That is mils, and so it is the same thing as 5.75 percent of assessed value.  For a house worth $100,000 that is $230.  

How much does the JIPSD collect from everyone in the Town?   Our estimate is $84,000 per mil, so that would be $4.8 million.   Now, the James Island PSD collects more property tax than that because there are a few people on James Island that are not in the Town or the City of Charleston.   Also, they are able to collect property tax on some people who already annexed into the City of Charleston.

Look again at your tax bill.    Charleston County charges 40.2 mils for County Government Operations and 6.6 mils for bonds, which adds up to 46.8 mils.   For a $100,000 house, you are assessed $4000, and 46.8 mils is 4.68 percent.   That is $187.20 per year.

Everyone in Charleston County pays the exact same millage to the County, 46.8 mils.  That includes people who live in the City of Charleston, Mount Pleasant, North Charleston, Folly Beach, Kiawah Island, Ravenal, Megget, Hollywood, and Awendaw.   And it includes people who live in no town or city, for example most of those living on Johns Island.     Here is a copy of a City of Chareston tax bill.    Here is one from Mount Pleasant.    Look at yours.   The millage for County Operating and County bonds are the same.

This is controversial because some people on James Island think that when we incorporated and formed a Town, these County property taxes should have been reduced.    Well, I am sure that people living in all the various municipalities wish these taxes were reduced for people living in municipalities, but they are not.  

Charleston County collects approximately $3.9 million from the property taxpayers in the Town of James Island.   Charleston County collects about $100 million in property taxes from everyone in the County.   Property taxpayers in the Town provide a little less than 4 percent of the total property tax revenues for Charleston County.    Our population of 20,000 is a little less than 6 percent of the total population of 348,000.    (What is up with this discrepancy?  Think about the appraised value of the properties below Broad, and on the front beach of Kiawah, Seabrook, Folly, Sullivans, and Isle of Palms.)

During the second  incorporation of the Town, Charleston County Council created a rule that any municipality with a population over 5,000 must pay for any basic services provided by the County.    This rule was imposed at the beginning of the third incorporation.    The other three municipalities with populations over 5,000 are the City of Charleston, the City of North Charleston, and the Town of Mount Pleasant.   We are supposed to be treated the same as they are.

What are these basic services?     For the most part, it is public works--road and drainage maintenance.    For paved roads, the maintenance is filling potholes in town roads.   State roads and resurfacing of paved roads are covered by either SCDOT or county government, mostly out of state or federal funds.  Planning and Zoning, Building Inspections, and Code Enforcement are also included as basic services, but all of these generate fee or fine income that at least partly offsets the costs.    Most of the municipalities have public works departments, with the big three, the City of Charleston, North Charleston, and Mount Pleasant covering most of their expenses out of town funds.   Some municipalities, like Seabrook and Kiawah, receive next to nothing from County Public Works, with everything covered by property owner assessments.  

Law enforcement, on the other hand, is not included as one of these "basic services" for which municipalities must pay.    Charleston County Sheriff's Office provides law enforcement to any municipality in the county that wants it.   However, keep in mind that the other three municipalities with populations over 5,000, the City of Charleston, the City of North Charleston, and the Town of Mount Pleasant have their own municipal police  departments.   Further, most of the smaller municipalities have police departments as well, such as Folly Beach.

If you haven't heard about this yet, I am telling you now.   Other local municipal governments complain that their citizens pay the exact same property tax millage to the County as those of us in the Town of James Island, but we are getting our policing from the Sheriff's Office for "free" instead of paying for our own police department like they do.    The Sheriff's Office budget is about $60 million, 20 percent of the County's total budget of $346 million..  However, about $24 million is narrowly "law enforcement" with personnel of 305.  

The national average for police forces is between one and two officers per thousand.  Our population is 20,000, so that is between 20 and 40 officers.   The Sheriff's Office will provide off duty officers for $27.50 per hour.   That is $55,000 per officer per year.   For 30 officers, that would be $1.65 million per year.     (Keep in mind that 30 officers isn't 30 on patrol at a time.   It takes about 4 patrol officers to have one on patrol 24/7.   And don't forget desk duty, detectives, and a police chief!)

The City of Charleston imposes a municipal tax rate of 77.1 plus 2 for drainage improvements.  That is 79.1.    Suppose the Town of James Island imposed a millage equal to the difference between what the James Island PSD charges and the City of Charleston.   That would be 21.6 mils.   For a $100,000 value house that would  be  $86 per year.   However, the local option sales tax municipal property tax credit would show up on your bill, so the actual increase in the amount paid would be about $39 per year.

The Town would collect about $800,000 and the rebate checks from the Town would no longer arrive each year.  Of course, the town wouldn't spend the $1 million per year to send those checks   This would come close to doubling the Town's revenues from $1.6 million to $3.4 million.    The current operating budget for the Town is $2 million.   Three years from now, we will have to cut spending by $400,000 per year unless our other sources of revenue that depend on economic activity, like business licenses, local option sales tax, and even state aid to subdivisions expand.

I hope you all know that I am very fiscally conservative.   While our current budget is very small for a town of 20,000, the JIPSD is spending another $12 million to provide what are really municipal services, for the most part to people in the Town.   While our property tax rates (paid to the JIPSD) are lower than the City of Charleston or North Charleston, they are higher than the Town of Mount Pleasant, and much higher than the Folly Beach, Sullivan's Island, or the Isle of Palms.   (Most of us pay smaller bills with our higher rates than most people in those towns because their houses are worth more on average.)  

I believe we need to hold the line on government spending in the Town.   I  hope sharing these figures helps you understand why.

How Did it Go?

How did it go?

It is difficult to say.

Can we take the questions of the Justices to suggest their current thinking?

If so, then the chance that they will overturn the incorporation legislation is small.

On the other hand, they may determine that the Town was improperly formed under existing law.  The City has a long list of complaints about the paper work filed to form the Town, some of which sounds trivial to me, but others are more substantive.

Some parcels (perhaps vacant lots but sometimes the homes of individual citizens) were removed from the Town by the Circuit Court because they had already been annexed into the City or were not contiguous.    Out of the approximately 9000 in the Town less than 200 were removed by the Circuit Court.

Generally, the Supreme Court is supposed to be reviewing issues of law, and to some degree, whether or not the Town was properly formed are matters of fact.   Were the legal principles the Circuit Court used in finding fact appropriate.

I think so.   But we will soon find out if the Supreme Court agrees.

What will the Supreme Court do?    They might close the Town down.

If the Supreme Court decides against the Town, we will have to incorporate a fourth time using the current law.