More on the lost Tax Credit

David Engelman, Chairman of the James Island Public Service District, included in the District's Island Update, a bit more information as to why he and the majority of Commissioners refuse to work with us to provide a tax credit to Town taxpayers.  (Island Update is included with the monthly sewer bill.)

First, the Chairman repeated his claim that "it would significantly increase the District's accounting and auditing costs."   This is just what he said in the letter he wrote to the Town on June 11th.  Still no explanation as to what these "accounting and auditing costs" are exactly and how much they would be.

In my view, if the Town's specific proposal would create added accounting or auditing costs, we should modify the proposal to reduce the costs.   But first we need some explanation of what these costs would be. Then, the Town would like good faith negotiations rather than a flat refusal.

Second, he argues "It would cause confusion among District taxpayers, as Town residents would receive the credit, but those living outside the Town's limits would not.  Answering tax bill questions would increase the District's customer service base."    This is slightly more informative than the version mailed to the Town, which stated, "It would cause confusion among our constituents and significantly increase the District's customer service costs."

It is important to understand that the James Island PSD does not create property tax bills, mail them out, or receive money from taxpayers.    The Charleston County Auditors Office creates the property tax bills and mails them out.   These tax bills include the property taxes imposed by the Charleston County School Board, Charleston County, and various other jurisdictions, including the JIPSD.   The Charleston County Treasurers Office receives a single payment from each taxpayer to cover all of the property taxes.  The Charleston County Treasurer's Office then sends a limited number of checks to each of the various jurisdictions.   The JIPSD will be receiving a limited number of checks for all of the property taxes collected from District 3-8, which is the Town's tax district.

The Town's proposal is that the Charleston County's Auditor's Office make the adjustment to the tax bills, not the JIPSD.   There would be a Town of James Island tax credit line on the bill, which would reduce the amount of money the taxpayer pays to the County Treasurer.   The Charleston County Treasurer would reduce the amount paid to the James Island PSD.   And then the Town would write a single check to the JIPSD to make up the difference.

Only residents of the Town would have "Town of James Island tax credit," on their tax bills they receive from Charleston County and pay a reduced amount to the Charleston County Treasurer.    Apparently, James Islanders who live in the District, but not in the Town, would find out that their friends and relatives who live in the Town received a tax credit.    They would ask, why didn't we receive the credit?   The answer, of course, is that they don't live in the Town.  

I doubt that many taxpayers bring questions about their tax bills to the JIPSD.   The questions go to the County Auditor who makes up the bills   Regardless, we at the Town will be more than happy to listen to any complaints of those who were formerly in the Town and want to return to obtain tax credits.

Finally, there was a significant addition to what was in the previous letter to the Town regarding legal issues.   Before, all that Chairman Engelman wrote was that "it is legally complicated and questionable."   Exactly how is it complicated or questionable?   Chairman Engelman now claims that "participating in the proposed plan would likely involve the District in a costly legal battle.  By law, public service districts are not entitled to receive Local Option Sales Tax money. Mayor Woolsey's plan would invite a lawsuit, which the District would probably lose."

This is a little more specific.   Our lawyer reviewed the proposal and found no problems.   Perhaps Chairman Engelman could actually cite the law that he believes would cause a problem.   There is no doubt that the money received from the Local Option Sales Tax belongs to the Town.  Because the Town has no property tax millage, we are legally entitled to spend it as we see fit.   I find it hard to believe that the JIPSD can be prohibited from accepting money from the Town in payment for fire protection or solid waste pickup.

Still, the Town would be more than happy to have our lawyer discuss this matter with the JIPSD's lawyer.   Again, we are interested in good faith negotiations.

While some variant on the current proposal is possible, there is an alternative.   The Town can charge all the property tax millage, provide the Local Option Sales Tax credit exactly as is done in other municipalities, and then pay the JIPSD for fire protection and solid waste protection.   If that is the option the JIPSD prefers, I am willing to start negotiations.