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Half-cent sales tax short $1.4 million
By Dennis Quick
Senior Staff Writer
The first check the Charleston County treasurer’s office received from the half-cent sales tax earlier this month fell $1.4 million short of what the county expected.
Nevertheless, the shortfall’s impact on county road and transportation improvements and on green space preservation is negligible, according to county officials.
Although it is possible some projects might experience delays, “overall, there won’t be any impact,” said Harold Bisbee, county controller, who expects most of the shortfall to be collected by June 2006.
“There is no impact at this time,” said Lance Covington, manager of Charleston County’s RoadWise program, which is planning road improvement projects throughout the county.
The county received $7.9 million out of a budgeted $9.3 million. The county and the state Department of Revenue, which issued the half-cent sales tax check to the county, are investigating the shortfall.
The department notified retailers in February that the half-cent sales tax would be implemented May 1.
Some retailers probably reported the half-cent sales tax with the state’s 5 cent sales tax or with the county’s 1 cent local option sales tax or simply failed to report the half-cent sales tax at all, Bisbee said.
“Any time you have a new tax, it takes a little time for people to get accustomed to it,” Bisbee explained.
The Department of Revenue collects all the sales taxes at the same time.
Nearly 60% of Charleston County voters approved the sales tax during a Nov. 2, 2004, referendum. The tax is expected to raise $1.3 billion over the next 25 years to improve roads, bridges, mass transit and develop and improve parks and green spaces.
Of the referendum’s $1.3 billion to be raised over 25 years, improvements to Charleston County roads, bridges and highways would get the lion’s share—83%, or $1.08 billion. Of that 83%, the Charleston Area Regional Transportation Authority, the Lowcountry’s mass transit system, would get no more than 18%. The remaining funds, about $221.5 million, would be used to create parks, build new recreational facilities and improve existing ones, and preserve green spaces.
Charleston County voters first approved the half-cent sales tax during a 2002 referendum, but the approval got overturned by the state Supreme Court, citing biased language in the ballot.
The overturn dealt a serious blow to CARTA, which suffered a 75% cut in services and raised its bus fares from $1 to $1.25. In 2004, the number of CARTA bus routes dropped by more than half, and the number of riders plummeted from about 4 million to 1.2 million.
But the passage of the 2004 referendum inspired Charleston County Council to earmark $6.5 million of sales tax money for CARTA, which the transportation authority used to beef up its operating budget. In June of this year, CARTA more than doubled its bus routes, more than tripled its bus fleet and restored previously cut services.
In January, the transportation authority will launch the next phase of its rebirth with express buses, park-and-ride routes and service to the Charleston International Airport, Isle of Palms, Sullivan’s Island and other high-traffic areas.
CARTA Executive Director Howard Chapman is confidant the county will recoup the $1.4 million sales tax shortfall.
“They’ll probably collect it in the first quarter,” Chapman said.
Regional growth will put the county ahead of the 25-year schedule in collecting the total $1.3 billion, Bisbee predicted.
“I think we’ll have the money by year 2023,” he said.
Dennis Quick is senior staff writer for the Business Journal. E-mail him at dquick@charlestonbusiness.com.
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