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City of Charleston officials prepare to address $2.2 million budget deficit

Published: Nov. 10, 2021 at 9:48 PM EST|Updated: Nov. 10, 2021 at 11:39 PM EST
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CHARLESTON, S.C. (WCSC) - The City of Charleston is projecting a $2.2 million budget deficit for the next budget cycle. Members of the Ad Hoc Budget Advisory Committee recommended filling that deficit by increasing property tax on Wednesday.

A final draft budget is expected to be presented at city council next week with a three mills increase to property tax. That kind of increase would boost revenues by $5.1 million, more than enough to cover the deficits.

However, the advisory committee also recommended adding new expenses as well. The extra money would allow the city to restore the cuts it made last year to a tune of $1.7 million. It would also allow for a boost to minimum wage for city employees, which would jump from $13 an hour to $14 an hour.

For perspective, the increase in tax would make a home valued at $500,000 inflate your tax bill by $60 to $90, depending on where you live.

The committee briefly considered not increasing millage and instead drawing on the city’s healthy reserve fund, however the idea was discarded due to the implication of using one-time funding to fix a structural budget problem.

The city is still recovering from the impacts of COVID-19 on tourism dollars. The recovery is better than anticipated. In fact, the city projected to bring in around $17.5 million in tourism-related taxes and fees for 2021. As of Oct. 31, the city has brought in more than $24.5 million. Officials expect to end the year above $30 million, nearly doubling the projection but still falling short of a pre-COVID 2019 that brought in $32.4 million.

For 2022, the city is banking on a revenue projection of $32.4 million.

City officials are expected to present a draft of the budget on Nov. 16.

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