Charleston considering options to fund $7.8M shortfall in 2023 budget

The city of Charleston says they are short millions of dollars for next year’s budget and are looking for ways to come up with that money.
Published: Nov. 2, 2022 at 3:41 PM EDT|Updated: Nov. 2, 2022 at 6:53 PM EDT
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CHARLESTON, S.C. (WCSC) - The city of Charleston says they are short millions of dollars for next year’s budget and are looking for ways to come up with that money.

The city says they need about $7.8 million extra next year. They say that’s to fund pay increases for all city employees, such as police, fire and staff.

“We have massive staffing shortages in our public service department,” Councilmember Ross Appel said. “Those are the folks who pick up the trash, pick up the garbage on the side of the road.”

Council will be mulling over two options until the budget is finalized.

One option is they could raise the millage by 5 miles, or about $100 on a $500,000 home, or by using credits from the Local Option Sales Tax form to fund the shortfall. Appel said an option that would not include raises for city employees isn’t being considered.

He also said around 70% of the local sales tax automatically goes toward property taxes, which he said will cut taxes by $28 million this year.

“It’s one of the ways hospitality and tourism help lower residents’ property taxes, but of course, the LOST is also paid by city residents when we go to the grocery store or go to restaurants and things like that,” Appel said. “We’re raising taxes and not recouping the revenue we need, so we always end up having the same discussion every year about raising millage, but we never get the benefit of the actual property taxes, so we’re not able to as easily keep up.”

For the past few years, Appel said the sales tax credits have gone up each year.

“That’s why city property taxes are lower today than they were in all the way back in 2009, even though City Council has repeatedly voted to ‘raise’ property taxes since then,” CFO Amy Wharton said in a statement.

Appel also said the sales tax leads to a yearly debate on the council.

“Last year, we raised property taxes by 3 mills, but once you factored in the LOST credit that we received from the state, property taxes actually went down in 2022,” Appel said. “So, there wasn’t actually a tax increase in 2022, and we’re facing a similar dynamic in 2023.”

Councilmembers and staff still have a few months to work on the final changes to this budget, which starts in January, but overall, they said they’re happy with how it looks.