At the JIPSD Candidate forum, there was a question about the LOST tax credits.
Unfortunately, the question was muddled. Moderator Andy Savage asked if LOST funds should be used to provide a tax credit to people in the Town, or was that unfair because it would only go to those living in the Town and that instead the funds should be used for these needs. Presumably, "these needs" referred to the infrastructure needs that he had asked about before. He had asked whether roads or sewers were the more important infrastructure need on James Island.
I would say the biggest news is that Candidate Sandi Engelman, wife of past JIPSD Chairman David Engelman, said that the tax credits could be placed on the tax bills, but that the "wording" would have to be done very carefully. However, she insisted that the checks be sent out this year.
This is consistent with what she wrote in an email to me, but there she more explicitly offered a deal--if the Town would mail checks this year, then in the future, tax credits could be placed on the tax bills.
In the Spring of 2013, the Town proposed to the JIPSD that tax credits be placed on the tax bills. I asked the JIPSD to begin discussions on what we should do. I would have been more than willing to listen to proposals regarding careful wording.
The JIPSD Commissioners said no. They didn't say it was illegal. They said, mail the checks.
In the December of 2013 and then in March of 2014, the Town made two different proposals to the JIPSD to put tax credits on the tax bills for the fall of 2014. The JIPSD said no. Here we started getting some (bad) legal arguments. And also, we started getting the claim that the County Auditor said it would be illegal.
The Town held discussions with the JIPSD over the last two months about getting a tax credit on the 2015 tax bill. JIPSD Chairman Hollingsworth said no.
At the forum, Hollingsworth said that he called the County Auditor who said that it would be illegal.
I have been in discussion with the County Auditor regarding what exactly the Town and JIPSD resolutions must say in order for those tax credits to appear in the Fall of 2015. The County Attorney, County Treasurer, and County Auditor have no objection to a Town tax credit on the tax bill. All is that is necessary is that a majority of JIPSD Commissioners agree.
It can happen 2015. There is a majority on Town Council ready to go. (There has been a majority on Town Council ready to go since 2012.)
What is the hold up? Only Commissioners Brown Crouch and McMillan would vote for the resolution. The other five would vote no. That is why it is important to reelect Commissioner Brown-Crouch and also three new commissioners who will have an open mind and be willing to vote in favor of a resolution for a tax credit.
Why will the other five vote no? Because Trent Kernodle tells them to vote no. Why is he telling them to vote no? What they say is that Trent Kernodle says it is illegal.
Really? Will the law change if the Town mails checks before this Christmas? Or has it always been true that all that is needed is "careful wording."
I don't know what Chairman David Engelman and Trent Kernodle have told the other Commissioners, but I think we are getting to the bottom of what is going on.
If the Town had been providing these tax credits on the tax bills for the last two years, then when Trent Kernodle ran for Mayor against me, he would not have had the issue "mail the checks, it feels like Christmas."
At the forum, candidate Kay Kernodle echoed her husband's campaign slogan from last summer. We should send the people the checks for Christmas.
Candidate Robert Schurmieir repeated the same slogan as the rest of the Kernodle Team. Mail the checks for Christmas. As mentioned above, Sandi Engelman is demanding that the checks be sent this year..
Kay Kernodle said that the "other Towns" have mailed the checks. In emails, Sandi Engelman wrote that the "other mayors" have mailed checks.
The first Mayor of the Town, Joan Sooy, never mailed a check. She worked with the Charleston County Auditor to put credits on the tax bills. (The Sooy plan was more or less what the Town proposed to the JIPSD in the spring of 2013 for the 2013 tax bill.)
Unfortunately, the bills with the Town tax credit were never mailed back in 1995. The Town was ordered dissolved, and while the order was stayed pending appeal, the City of Charleston and Mount Pleasant went to court to block tax credits from a "dissolved" Town.
No checks were sent by the second Town. No tax credits were provided.
It was in the third Town, under Mayor Mary Clark, that the check writing program was instituted. It was reviewed for legality by JIPSD Attorney Trent Kernodle. (We have the legal bills, but Kernodle provided no written report.)
LOST tax credits are supposed to reduce the taxes paid on all taxed property. That includes houses, businesses, apartments, cars, and boats. The Clark check writing program, approved by JIPSD Attorney Trent Kernodle, provided no tax credit for cars or boats or any other taxed personal or business property.
LOST tax credits are supposed to be proportional to appraised property value. The Clark check writing program, approved by JIPSD Attorney Trent Kernodle, was in proportion to the taxes paid to the JIPSD. This makes a difference. The result was less tax relief for homeowners and more tax relief for owners of commercial and rental properties.
According to the LOST statute, if a Town provides credits that are too low in one year, it must take any extra money received plus interest on it and provide a larger credit the next year. Sending out checks to "rebate" the excess would be contrary to statute.
I am strongly opposed to any tax relief program that cuts out cars and personal property or short changes homeowners for the benefit of owners of commercial and rental property. The Town's current plan is to continue to save the money we receive, allow it to accrue interest, and work to provide a larger credit next year. The plan has been to provide tax credits in amount and to property owners in a way consistent with the LOST statute.
And, of course, the LOST tax credits are supposed to appear on tax bills and reduce the amount of tax paid. It is not supposed to be a program by which Towns mail out checks as Christmas presents.
No other municipality in South Carolina mails out checks. Nearly all municipalities reduce the amount of taxes paid on the tax bills.
A small number of municipalities just spend the money on current operations. In Charleston County, that includes Ravenal, Megget, Kiawah, Seabrook, Hollywood, and Rockville.
Personally, I remain committed to using the funds for tax relief rather than spend the money on Town operations.
I think that Engelman, Kernodle, Holliingsworth, and Schurmieir will continue to fight the Town on this. Perhaps the Kernodle team hopes that they can use "mail the checks" as a campaign slogan in four years.
Candidate Mary Beth Berry said she thought that providing the tax credits on tax bills would be efficient and sensible. Thanks! (When Mary Beth was on Council, she was always supportive of the Town's tax credit proposals to the JIPSD.)
While Commissioner Brown Crouch said that the Town should spend the money on operations, she told me that she would support the Town's effort for a credit on the tax bill. That is how she answered the questionnaire. She also said she discussed this with Commissioners from other Districts in the state, and that no one else was telling municipalities to write checks.
Lyndy Palmer sounded like she was answering the question asked by moderator Andy Savage. She said it was nice getting the checks and that it wasn't that much money. But she already responded to my questionnaire saying she supports providing credits on the tax bills.
Candidate Marilyn Clifford explained that LOST stands for Local Option Sales Tax, explained why it is only available to residents of the Town, and supported credits on the bill. She had also answered the questionnaire saying she supports providing credits on the tax bill.
Candidate Hal Hanvey said that the proposal to provide tax credits on the tax bill made sense but that he is an equipment guy and lacked the legal expertise to determine its legality. He did answer the questionnaire saying he trusted more in the Attorney General Office's opinion than in Trent Kernodle's opinion. We can count him having an open mind and supporting getting a second legal opinion rather than just taking Trent Kernodle's word for it.
Candidate Bill "Cubby" Wilder said that he liked getting the checks and that the check writing was a "proven model," and that as a commercial property owner, it was very beneficial to him. But that he wouldn't get anything now, because he is not in the Town. He did answer the questionnaire saying he supported tax credits on the tax bill.
Candidate Ernie Duncan was absent. He had a headache.
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