“SOLUTION IS NOT TO TAKE AWAY AUTHORITY FROM LOCAL GOVERNMENT”
Dear Editor: There are three bills before the S.C. House of Representatives that will change how local government collects business license fees; H. 3490, H. 3337 and H. 3233. The history of South Carolina shows a lot of State level interference in local affairs. Until the Home Rule Act passed in the early 1970s county delegations of House members and Senators appointed the county council members in their respective counties. Until the 1920s, local governments were funded through a complex series of taxes and fees set by the local council members. In the interest of simplifying those taxes and fees for business and citizens, the State created the Local Aid to Subdivisions Fund and collected the taxes and fees on behalf of the localities. In 1991, the State created the Local Government Fund to replace the Local Aid to Subdivisions. This new law is specifically funded according to the State Budget Law. Beginning in 2009, the State Legislature began “underfunding” the LGF in order to provide for its own needs, depriving local government of one of its sources of support. The State continues to “underfund” the LGF to this day oblivious to its own legal mandates.
In the early 2000s the Legislature passed Act 388 which shifted the tax burden from residents to businesses through property tax relief. Governor Mark Sanford touted that legislation as controlling rampant millage increases by local government. Upon passage of that bill, millage increases were capped as a percentage increase based upon a change in population and the Consumer Price Index. Many local governments had been fiscally responsible and had rolled their millage to zero based on their ability to control spending and revenue prior to the passage of Act 388. After Act 388, those responsible governments found themselves unable to impose a millage since any percentage of zero is still zero. Local government was punished for being responsible and forced into relying on other sources of revenue.
So, we have local government relying on four primary sources of revenue: Property Tax, Business License Fees, Franchise Fees and Local Government Fund. Sales taxes represent a smaller portion of local government funding. Combine where local government is funded with the State House history of usurping local authority and the ground work is in place for another legislative takeover through H. 3490, H. 3337 and H. 3233. Not satisfied with stealing money from the Local Government Fund and imposing caps on local millage rates they are going to cap what local government can collect in business license fees. While at the same time, they write blank bailout checks to South Carolina State University, over spend their bonding limits on Interstate Highways and increase the gas tax. I think that the Legislature should back away from the tax buffet before they start imposing a tax diet on local government. Should we stand for more of the “do as I say, not as I do” from Columbia? Local government costs money to operate. Firefighters, paramedics and police officers do not work for the State of South Carolina, they work for cities and counties. Local landfills are operated by cities and counties, not the State of South Carolina. How are cities and counties supposed to provide these essential services to their citizens when the South Carolina Legislature continues to deny local government the ability to fund these operations?
I can appreciate the position of small businesses. They have been picked on by the legislature over and over again. Sales tax increases, high state personal income tax rates (where the majority of small businesses file and pay taxes) while at the same time, large corporations like Boeing and BMW are grated “fee in lieu of tax” certificates and other tax breaks. The solution is not to take away the authority of local government. The solution is to get state government to treat each business fairly, whether they employ 5 workers or 50,000.
Finally, there may be an element of political partisanship at play in one of these bills. Rep. Rick Quinn (R-Lexington) has filed H. 3490 in the House of Representatives. After filing that bill, Richard Quinn and Associates has bombarded local government with Freedom of Information requests for information on business licenses: Names, phone numbers and e-mail addresses.
That is a lot of information in the hands on one company that is in the “marketing” business.
Mona: Very interesting – and I appreciate your letter. FITS actually addressed the home rule issue in its earlier coverage of this bill – acknowledging that our editorial position was a little bit hypocritical.
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