In a 5 to 1 vote, James Island Public Service District Commissioners voted against cooperating with the Town of James Island to provide a 7 mil tax credit on the 2014 property tax bills going out this fall. The proposed tax credit would have reduced JIPSD property taxes for Town residents by approximately 14%.
The JIPSD Commissioners voted for a letter prepared by Chairman Engleman with the help of Commissioner Welch rejecting the Town's proposal. Commissioner Platt suggested softening the rejection a bit by adding "at this time." Commissioner Welch proposed an amendment to that effect, which passed.
Chairman Engelman and Commissioners Welch, Hollingsworth, Platt and Waring all voted to notify the Town that they would not help. Commissioner McMillian voted no, favoring cooperation with the Town. Commissioner Brown-Crouch abstained.
The Town received the letter today. The reasons given for opposing cooperation with the Town were 1) It would not increase the amount of tax relief Town residents receive from the local option sales tax, 2) It would significantly increase the District's accounting and auditing costs, 3) It would cause confusion among our constituents and significantly increase the District's customer service costs, 4) It is legally complicated and questionable.
Engleman's letter concludes with the claim, "we believe that most Town residents like receiving their annual local option sales tax refund checks directly from the Town."
There was no explanation of or effort to quantify "accounting and auditing costs," or "customer service costs." There was no explanation of the alleged legal complexities or complications.
In the letter outlining the proposal sent on May 8th, I asked for recommendations from the JIPSD to improve the proposal. The JIPSD asked for no clarification or suggested no modifications to the Town. It seems clear that the majority on the JIPSD were not interested in good faith discussions with the Town.
I went to the JIPSD meeting on June 10th and explained the problems with the check writing program in the third incorporation. The County Auditor's Office has reported that there are more than 12,000 different tax accounts in the Town. In the spring of 2011, the Town paid an outside contractor $14,000 to write and mail a similar number of checks. Hundreds were returned because of bad addresses. The Town maintained checking accounts from three different years with tens of thousands of dollars sitting idle. (All of that money is part of the $1.5 million from the third incorporation that will be going to the City of Charleston and other area municipalities.) The Town had a special "tax credit" hotline, because problems with the program tied up the Town's regular lines. The Town's single Finance Clerk spent about half of his time for several months correcting errors and writing new checks. I think that the check writing program was an administrative nightmare.
The June 2011 Town Newsletter, mailed to all residents, included an article explaining that in the future the Town would seek to work with the Charleston County Auditor's Office and the JIPSD so that tax credits would appear on the tax bills, reducing the amount paid by each taxpayer. The proposal was included in the feasibility study for the fourth incorporation turned in to the Secretary of State in November 2011 and discussed before the Joint Legislative Committee on Incorporation in Columbia in February 2012. It was also included in an article in the Free James Island newsletter titled "Vote Yes on April 24" and circulated starting in March of 2012.
The Charleston County Auditor, Peggy Mosely, has been very helpful. The Town now has its own tax district. Officials at the Auditor's Office can program their computer to make the proper reduction for every property tax bill going to Town residents.
The Auditor's Office is willing to make this adjustment. While the JIPSD would receive less money directly from the County Treasurer, who receives all of the property tax monies, the Town would write a single check to the JIPSD to offset that reduction, covering the cost of the tax credit. Legally, the Town would be directly paying for 14% of the cost of fire protection and solid waste collection for the residents of the Town, with the residents of the Town continuing to pay for 86% of the cost through property taxes.
While the concept of the tax credit was made public in 2011, the actual proposal had to wait until the County Auditor's office provided an estimate of how much money the JIPSD is collecting from taxpayers in the Town." The estimate is approximately $2.7 million per year. The Town has $450,000 budgeted for a tax credit, and so the Town's proposed a 14% credit.
It is getting too late to provide a tax credit on the 2014 tax bills going out this fall. I am looking into the cost of a check writing program to report to Council, but after experiencing the disaster in 2011, my view has always been, 'never again'." I am hopeful that since the JIPSD said that it was only rejecting cooperation "at this time," there may be hope for good faith discussions leading to an agreement for the 2015 tax year. What we need is for the voters of the Town to demand that their representatives on the JIPSD cooperate with the Town rather than treat us as another enemy.
I am also looking at a third alternative--have Town Council set the property tax millage for the Town, have the local option sales tax applied to tax bills as it is in other municipalities, have the Town receive the property tax revenues from the County Treasurer, and then have the Town pay the JIPSD for solid waste collection and fire protection. Most municipalities are responsible for these property taxes and state law provides protection to municipal voters and taxpayers that don't appear to apply to the JIPSD.
I strongly opposes any effort to redraw the boundaries of the JIPSD to exclude the Town. I will always demand the right of Town voters to have representation on the James Island PSD.
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