Mount Pleasant raises business license fees, taxes to fund infrastructure projects

By Andy Owens
aowens@scbiznews.com
Published March 12, 2014

Mount Pleasant Town Council voted for a 3-mill increase to property taxes along with an increase in stormwater, planning and business license fees last night.

Overall, the town estimates the changes will raise $3.25 million each year for capital improvement projects, including infrastructure improvements and repairs, such as crumbling pavement, sinkholes, and water and sewer line repairs.

The vote increased business license fees by 33 cents per $1,000 of income for every type of business sector. The measure also increased the ceiling for higher-income businesses to qualify for a declining business license rate from $1 million to $3 million and eliminates a sliding scale of reductions.

Municipalities often use a rate reduction to attract larger businesses or to encourage expansion.

Under the changes, businesses with income of more than $3 million can qualify for a 30% reduction in business license fees. Previously, businesses could qualify for a sliding scale of reductions as their income increased, up to a 40% discount. Now, anything over $3 million can receive a 30% reduction, but companies with income of $3 million or less pay the full rate.

Council approved doubling stormwater fees, going from a base rate of $30 to $60 for homeowners. The town estimates the increase in property taxes will result in $45 more each year for the average homeowner based on an average sale price of $373,000 in Mount Pleasant in 2012.

The planning fee increase is to cover normal costs of doing business, Mayor Linda Page said. For example, in some cases, the cost of legal ads is more than the town collects from developers for placing the ads, she said.

The first reading for the tax increase caused the most debate among council members, with Councilman Mark Smith noting that four increases were being discussed. No one disputed the need to pay for capital projects and fund infrastructure improvements and repairs. But not everyone agreed that tax increases now were the best option to pay for it.

Councilman Gary Santos asked if $23 million unallocated from the town’s general fund could be used before tax increases were considered. Page said that money would be used and depleted long before the town was able to pay for what was needed. A financial study found the town’s fund balance would run out by 2019, she said.

Smith asked for the vote on the increase to be tabled to allow council to review how further cuts might be made to reduce the amount of the increase. He also suggested that the tax increase be earmarked only for infrastructure improvements and then allowed to sunset after the projects were completed.

“I just want to make sure that we’re protecting those dollars,” Smith said.

Page said earmarking the money would unnecessarily tie the hands of the town staff, which will need flexibility to allow oversight of the several projects the city has planned. She also said the city’s ongoing infrastructure needs won’t end when those projects are completed, including $14 million required to maintain Mount Pleasant’s current infrastructure assets.

“I appreciate your wanting to sunset this increase, but I see no sunset to the demands,” Page said.

Councilman Chris O’Neal supported the increase, noting that everything that could be cut had been, and the next step would be to close facilities and reduce staff. He said unfunded federal mandates regarding stormwater monitoring and increases in fire services to keep insurance rates low have caused the town to incur expenses that haven’t been offset.

“If we’re not going to support this millage increase — and this council has financial obligations — I hope that those who don’t support it will come with an idea of how many staff members to cut or what facilities they’d like for us to close,” O’Neal said. “This is the reality of where we’re at. I don’t like it. I don’t like going back to our citizens and asking for money, but this is where I feel like we are.”

Mount Pleasant’s municipal staff provided information (.pdf) on how the property tax and stormwater increases would be used in the town, including what has been cut to reduce costs since 2008.

Council members Santos, Smith and Ken Glasson all voted against the property tax increase, which passed 6-3.

Reach Andy Owens at 843-849-3142.

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