PSD Public Hearing on Monday

The James Island Public Service District Commissioners (PSD) will hold a public hearing on their proposed 13% property tax hike next Monday, June 25 at 5:30 PM at 1739 Signal Point Road.

I plan to be there.  You should come too.

The Mayor and Council of the Town have no say in the property taxes the PSD imposes in the Town, but our voters do.  These taxes are set by the PSD Commissioners who are elected by the voters of the PSD and the majority of PSD voters live in the Town.

The PSD funds fire protection and solid waste collection by property tax.   All residents of the Town and those in the unincorporated area of James Island pay PSD property taxes.   PSD property tax made up 47.4% of a homeowner's property tax bill last year.   While JIPSD property taxes are lower than those in the City of Charleston, they are higher than those on Folly Beach or Mount Pleasant.

Fire protection is a vitally important service for the people of the Town and solid waste collection is very important too. 

I understand that the PSD needs revenue to provide services.

Approximately 25% of the proposed tax increase is to fund the pay increases the PSD adopted a few months ago.  The reason for the pay increases was a compensation study that showed that starting pay and the raises previously provided to junior employees were too low for retention.   New fire fighters and other PSD workers would start at the PSD and then move on to area municipalities that pay more. The study showed that senior employees were modestly overpaid on average.

Most of the tax increase, approximately 75%, is to build a new fire station on Folly Road.   The PSD sued Charleston County claiming that the new Camp and Folly improvement project ruined the fire station on Camp Road.   Part of our 1/2 cent transportation sales tax money went to the PSD, and they have to spend that money on a new fire station, but what they got from Charleston County is not nearly enough. The PSD plans to borrow the rest, so most of the tax increase is going to be used to gradually pay back the loan along with interest. Regardless, the Camp Road fire station is very old and must be replaced eventually.

These proposed expenditures meet real needs for our community.  But I believe a 13% increase in PSD property tax is just too much.

The problem is that the PSD is too dependent on property tax.  South Carolina law only gives public service districts very limited sources of revenue and property tax is what they have available for fire protection and solid waste collection.  Municipalities, on the other hand, have much broader powers and many sources of revenue.

I believe that the solution to the PSD's funding problem is for the Town to help.

The Town levied a 20 mil property tax in 2015, but we provide a 100% property tax credit so that the share of the total property tax bill paid to the Town is zero.

Wouldn't it be great if the taxpayers could get a credit for their PSD taxes too?

The Town engaged the Pope Flynn law firm to come up with a solution.   They provide legal services to public service districts and towns and cities across South Carolina.   Their solution was for the Town to directly pay the PSD for some or all of the cost of solid waste collection for the residents of the Town. The same principle could apply to fire protection.  In exchange, the PSD would agree to allow the Town to put a credit against PSD taxes on the County tax bill.   This would reduce the total property tax bill for everyone in the Town.   The PSD would get the same amount of money, but they would collect less from Town property taxpayers and instead receive money directly from the Town.   The Town has many existing sources of revenue we could use for this purpose--business licenses, sales tax, state aid to political subdivisions and franchise fees are all examples.

If the PSD is willing to work with the Town, then like in most towns and cities in South Carolina, part of the cost of fire protection and solid waste collection would be paid by property tax and part by other sources of revenue.

I wrote the Chairman of the Public Service District, Cubby Wilder, and offered the Town's help.   I believe that the Town could come up with as much as $1 million per year to provide tax relief to those in the Town.   This would turn a 13% property tax increase into a 21% property tax cut for homeowners in the Town!

For an average $250,000 home, the PSD collected $569 in property tax last year.   The PSD proposed tax increase would raise that by 13% to $644.    If the PSD would accept the Town's offer of help, after the credit, the tax paid to the PSD would fall to approximately $450.   Instead of the share of a homeowners tax bill going to the PSD rising to more than half (54%) it would fall to 37%!  (These figures do not take into account tax increases that may be imposed by other government agencies.   Regardless, the Town's share of the property tax bill will remain zero.)

PSD Commissioner Kathy Woolsey has asked that pursuit of an intergovernmental agreement between the Town and the PSD be  placed on the agenda for the June 25 meeting. 

Please come to the PSD public hearing and ask that the Commissioners accept the Town's offer of help so that they can fund their very important services while avoiding an excessively burdensome tax hike.