Charleston City Council to consider tax increase to balance 2021 budget
CHARLESTON, S.C. (WCSC) - Charleston city leaders are working to balance the 2021 budget against an $18 million shortfall.
The Charleston Ad Hoc Budget Committee met on Thursday and decided on a proposal that involves increasing taxes.
The shortfall projected for next year comes on top of the $42 million shortfall the city managed in 2020, ending the year with a reaffirmation of Charleston’s AAA credit rating by both major rating agencies, according to city spokesman Jack O’Toole.
City leaders say they have lost a lot of revenue due to COVID-19 impacts. Leaders say they have been able to keep expenses down with budget cuts and tough decisions.
“We’re freezing city hiring for another year and we are also not doing a cost-of-living increase, which I regret but frankly these are hard times. We are also not increasing the minimum wage,” Mayor John Tecklenburg said during the meeting.
Even with those changes, the city will still be $14.7 million short in the budget.
That is why they are considering a plan that involves a three-mill property tax increase and 50% reduction in the Local Option Sales Tax Credit. That means a homeowner with a $300,000 home would pay $81 a year.
Charleston city councilman Peter Shahid says they have already made cuts to every city department. If they don’t move forward with the increase, the only other option would be to furlough people.
" [This means] your trash is not being picked up, you are furloughing fire personnel, you are furloughing police officers. It impacts service to the community," Shahid said. “Either we cross our fingers and hope for no fire, pray for no one breaking into your home, or we swallow this bitter pill and that’s what we’re looking at.”
City officials say if federal lawmakers pass a coronavirus relief bill that would give them some type of budget assistance, taxpayers will not need to worry about a tax increase or credit reduction.
The committee’s finalized budget will be presented to the Charleston City Council at a budget workshop on Nov. 18 and will go to the city’s Ways and Means Committee and full council for first reading on Dec. 1.
Although city council will need to pass a balanced budget by the end of this December, changes could still be made up until September 2021.
Residents would see the change in their tax bill in October of 2021.
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