Property Tax Credits

The Town sent out approximately 8600 checks to property owners in the Town of James Island last week.   Well, in reality, we paid a company to print the checks and mail them out to a data base we provided.

About a year ago, I looked at the 2009 Audit for the Town, I was surprised to find we had $2.4 in tax credits payable in on June 30, 2009.    When the Town received the the 2010 Audit last October, it showed $2.56 million in tax credits payable on June 30, 2010.

Of course, the previous administration sent out over $800,000 in tax credit checks in July of 2010, which reduced that item.   But each month, the Town receives a Property Tax credit check, which we put in the bank and add to our tax credit payable liability.

Why did the Town have such a large amount in Tax credits payable?   Because the tax credit checks were too small.   However,  the budget for the property tax payable fund showed expected receipts for the year, and check payments of $900,000, which simply copied the proposal made by the Clark administration.

My hope, all along, has been to work with the County Auditor's Office to have the tax credit placed on the property tax bills of James Island taxpayers, and then pay the money the Town receives directly to the James Island P.S.D. and no longer send annual tax rebate checks.

Sending the checks is expensive, it cost about $8,000 in printing and postage costs.    Further, because of problems in the database we use, the errors create an administrative nightmare.   Reviewing problems and issuing new checks because of problems with the checks issued in July has been a major drain on the time of our Finance Clerk.

However, I think that shifting to this system before the Supreme Court rules on the Town would be a mistake.   So, I thought that we might have to send out one more set of checks.

Last fall, I requested that the County Auditor's office provide a database of those receiving 2010 property tax bills in the Town of James Island.   (I also asked them to find out how much revenue a mil of property tax would generate as I reported before.)    It was my understanding that they had agreed to provide that information.

I was in no hurry.     However, at some point, I planned to request that Town Council approve a budget modification to pay out all of those accumulated tax credits payable.   Either we would send out one more set of checks, or, if negotiations with the Auditor's Office and the JIPSD went well, then everyone's property tax bills would be reduced and we would pay the money over to the JIPSD.

Then I went to Columbia and listened to the tone of Chief Justice Jean Toal's questions about the formation of the Town.

If the Supreme Court rules against the Town, then all funds will be seized and divided up.   That includes all of the money in property tax credits payable.

I became very concerned.  

I contacted the County Auditors office again for an updated database   I proposed a change in the budget to authorize the payment of the tax credits payable this fiscal year.   Budget changes require two readings, and so these were scheduled for the March 1st and March 15th meetings.

Because we hadn't received updated information from the County Auditor's Office, we began working on our existing data base, correcting for all the errors we had discovered since last July.    As March 15th approached, I contacted the Auditor's Office again, and they were still not ready.  

On March 16th, I made the decision to send out the checks using our existing data base.    In my judgment, it was the right thing to do, because of the risk of an unfavorable decision by the Supreme Court that could happen at any time.

Of course, when it turns out that the Supreme Court rules in favor of the Town, I will feel a bit foolish.   And as I, and the staff, work to fix the errors, I will wish we would have waited.

Again, I very much hope that this is the last time the Town will be sending out checks!