The Post and Courier
weighed in on conflict amoung the James Island Public Service District Commissioners about their budget and property tax millage. The Commission Chair
replied. Little light was shed by either.
A majority of Commissioners believed that the 13% property tax increase adopted in 2018 was more than necessary for the two stated purposes--increased pay for firefighter recruits and replacement of the current fire station on Camp Road. There was also concern that the cost of the new fire station on Folly Road was excessive--more than $8 million. They sought to reduce property tax by 2 mils to what they believed was necessary at this time--which would have left approximately 75% of last year's increase intact.
No Commissioner took the position that the District could operate forever with no millage increase. Their view was that property taxes should be levied as necessary to fund expenditures approved by the Commission--not based upon possible future expenditures requested by the District staff.
The Post and Courier's take was that it is all the Town of James Island's fault--for existing. If the people of James Island had not decided to "go it alone" and were part of the the City of Charleston, there would be no need to raise JIPSD property taxes. I suppose they believe that the cost of public services on James Island would be paid by those in the rest of the City.
It is true that if everyone on James Island annexed to the City, no one would pay JIPSD property tax--we would all pay City property tax. However, JIPSD property tax for homeowners only surpassed that in the City for the first time last year. The reason City homeowners paid less despite a higher millage is they benefit from a local option sales tax credit. Because of the way that credit is distributed, those of us in the JIPSD continued to pay less than those in the City on our cars and boats as did owners of business and rental property.
More importantly, the increase in the City's millage last year pushed the property tax burden on City homeowners back above that in the JIPSD. Annexing to the City is no way to save on property tax. Sure, more James Island costs could be pushed onto taxpayers in the rest of the City, but James Islanders who annex to the City must pay a share of the very heavy cost of providing services elsewhere.
The Post and Courier recommended that the Commissioners ask the Town to change our planning and zoning to allow more commercial and multi-family development. Its theory appears to be that intense development of our Island would increase property values and tax revenue for the JIPSD.
The Town already encourages businesses to open and supports redevelopment in what we call our "Commercial Core" centered at the Camp and Folly intersection. The Town has worked with the City of Charleston and Charleston County to adopt the Folly Road Overlay and continues to work with other jurisdictions to implement the Rethink Folly Road Plan. Those efforts aim to improve the Town's commercial district which would tend to generate more revenue for the JIPSD and the Town from a variety of sources.
Most of the Town is zoned single family residential and our density is three units per acre. We have only a few multi-family complexes that already existed when the Town was formed. However, the Town is mostly built out and our zoning simply reflects the residential patterns and densities that currently exist. I doubt whether rezoning the few vacant lots in the Town to multifamily would significantly increase property tax revenue.
What this is really about is the Post and Courier's commitment to so-called "smart growth" with James Island being slated for dense urbanization so that outlying areas such as Wadmalaw and Edisto Islands can remain rural. James Islanders are fine with keeping those areas rural, but few, if any, favor a complete change in the character of our Island. I certainly don't.
If we compare the cost of providing new infrastructure and services in outlying rural areas to the cost of providing it on a hypothetical hyper-dense James Island, the second might well be cheaper. But the JIPSD is not going to pay for any services off of James Island and it would have to bear the cost of the added infrastructure necessary if we were to allow developers to raze our existing neighborhoods and replace them with giant gathering places similar to what the City encouraged in what it annexed on Maybank near Folly.
There are three reason why the JIPSD must raise its millage from time to time. First, unlike municipalities and counties, its enabling act provides very limited sources of revenue. Fire protection and solid waste collection are solely funded by property tax. Second, the State of South Carolina requires a millage rollback with every five-year reassessment of property values. Third, the Federal Reserve targets a 2% inflation rate.
Inflation raises the dollar value of property and so a given millage should raise more revenue each year. However, SC law requires that the property values be reassessed every five years. With 2% inflation, that means that amount collected would stay the same for five years and the suddenly jump a bit more than 10%. But SC law also requires a millage rollback, which means each local government is left with an unchanged revenue after each reassessment. Unfortunately, inflation is causing that constant dollar amount of revenue to lose 2% of its purchasing power each year.
To keep up with inflation, the JIPSD must periodically raise its millage. All local governments have this problem, but it hits the JIPSD especially hard because it depends so much on property tax. Inflation raises costs for the Town too, but as prices rise, so does the total dollar value of sales and so the amount the Town collects in business licenses, franchise fees, and sales tax. There is no sudden jump every five years nor is there a mandated roll back of rates.
That is why Town is working with the Commissioners to provide a credit against the JIPSD property tax. The Town's other sources of revenue can be used to help pay for the fire protection and solid waste collection services the JIPSD provides our residents rather than depending solely on their property taxes. If the Commissioners approve the Cost Sharing Agreement with the Town in August, the property taxes homeowners in the Town pay the JIPSD will be approximately 30% lower than in the City of Charleston. And all without completely changing the character of James Island.