Thought you might like to read the op-ed I wrote for the newspaper. A “yes” vote Tuesday could RAISE PROPERTY TAXES By Senator Hugh Leatherman The people of Florence County on Tuesday will vote on whether to extend the penny sales tax increase for another seven years. I have not publicly addressed the issue, but am doing so now for one reason: In my opinion, there is a high likelihood that passage of the referendum WILL RAISE PROPERTY TAXES ON HOMES, vehicles and businesses. For this reason I will vote NO. Many of the proposed projects are good; some should receive much higher priority than others and should be funded regardless of the outcome of the referendum. The issue of how property taxes could be raised with passage of the penny sales tax has not been at the forefront of the debate. I had hoped more open debate would have taken place by now to give you all of the information you will need to make a decision, or at least to hold the referendum in a general election and not a special election where the voter turn out is historically low. The last sentence in the last paragraph in the long ballot question is clear. In part it reads: “…IN The EVENT THE SALES AND USE TAX TO BE IMPOSED AS STATED HEREIN IS INADEQUATE FOR THE PAYMENT OF SUCH BONDS, SUCH BONDS SHALL BE PAYABLE FROM AN AD VALOREM TAX IMPOSED ON ALL TAXABLE PROPERTY IN FLORENCE COUNTY... That is legal speak saying Florence County Council must impose higher property taxes if the penny sales tax does not produce all of the revenue to fund the approved projects. County Council would not have a choice; state law requires it because Council is getting the money through its bonding authority. To repay the bonds, Council must back its borrowing capability through taxes. If the sales tax, the most unpredictable of all taxes, does not cover the bonded debt, then PROPERTY TAXES MUST BE RAISED. We did not face this problem when we went to the voters seven years ago for a penny sales tax that would be used exclusively to fund road improvements. Higher property taxes were not a possibility because the projects were not funded through bonds. It was a “pay as you go” referendum, similar to the way most families do their finances. . Because of their complexity, many of the road projects have been slowed down by federal regulatory agencies. But every penny from the sales tax is in the bank, drawing interest that will be used to fund the projects. In addition, we obtained $250 million in matching funds from the State Infrastructure Bank. But on Tuesday’s ballot, there is no outside match to help with the funding. There is no guarantee against higher property taxes. Thirteen years as chairman of the Senate Finance Committee and thirteen years as chairman of the Joint Bond Review Committee have given me an understanding of government finance. My analysis indicates that Florence County residents could be subjected to property tax increases of between $14.8 million-$16.9 million. This projection is based upon current economic conditions. If the economy worsens and people cut back on buying, the property tax increase could be higher. Of course I do not know this for certain, just as those who assure you there will be no property tax increase do not know. But it is important for voters to understand that by voting “yes” on the referendum, they are APPROVING A PROPERTY TAX INCREASE if the sales tax does not produce the revenue. I urge you to go to the polls Tuesday and exercise your right to vote as you choose. You will decide if the proposed projects are worth the risk of RAISING THE PROPERTY TAXES ON EVERY HOME, VEHICLE AND BUSINESS IN FLORENCE COUNTY. As for me, I will be voting NO. Hope to see you at the polls.
Posted on: Sun, 03 Nov 2013 14:10:05 +0000