CHARLESTON, S.C. (WCSC) - The City of Charleston could be rolling back on tax credits given to property owners for the first time ever. City leaders say it would give them another tool to help balance next year’s budget where they face an $18 million shortfall.
Under the current budget proposal, taxpayers would see a 3-mill property tax increase and possibly a 50 percent reduction in the Local Option Sales Tax credit.
City taxpayers see a rebate on their property tax bills through money from the Local Option Sales Tax. Under state law, municipalities must give back 71 percent of that money to taxpayers, but the city usually gives back 100 percent of that money.
On Tuesday, city council voted to allow the option of withholding money from LOST to help balance the budget. Councilman Peter Shahid added an amendment that would allow them to give money back to taxpayers if revenue remains high.
“We gave ourselves some wiggle room not to give 100 percent back to property owners. No one likes that, no one wants that to happen,” Shahid said. “The amendment is there so that if certain things happen, like the revenue is still up or expenditures go down or we get money from other sources, we’re dedicating ourselves to take that LOST money and give as much back as we can to the property owners, hopefully it will be 100 percent.”
Five council members voted against the resolution. Some of them felt like the credit rollback along with a tax increase would only hurt residents.
“Putting taxes and that burden back on taxpayers after they’ve already suffered so much was just something we weren’t willing to do,” Councilman Harry Griffin said. “I can promise you that if we voted no on raising the mileage and rollback of local option sales tax, we could find a way to balance the budget without raising taxes.”
The alternative to the proposed plan would involve job cuts and pay reductions for employees. Councilmembers like Griffin said city leaders need to look at the pay cuts instead and reducing expenditures in some areas.
The resolution passed 8 to 5. It did not approve withholding any LOST money. City council will hold a public hearing on the budget proposal on Dec. 1.