The Honorable Michael G. Nettles, Circuit Court Judge, has issued a final order filed Thursday which held that Dillon County’s Council acted unlawfully when it, by a 4-3 vote, included Local Option Sales Tax (LOST) funds historically allocated to the Dillon County Board of Education in its own budget.
Judge Nettles held “that the County share of Local Option Sales Tax revenue funds should be distributed in halves between the Board and County.”
He also held that the original 2017-2018 budget was procedurally defective, but that a supplemental budget passed in August was passed under proper procedure.
The ruling means that the Board of Education is legally entitled to one-half of all County LOST revenues.
Richard Schafer, the Chairman of the Dillon County Board of Education, commented, “We are extremely pleased with the ruling, and are confident that the Judge made the right decision. We are also extremely disappointed that it had to come to this. We want the best for Dillon County, and hope that this can be the end of a bad chapter on County relations, and that all involved can work together productively from here on.”
The Court’s ruling comes after a lawsuit was filed on July 10, 2017 by Treasurer Jamie Estes asking the Court to rule on the legality of the County’s 2017-2018 budget. The ruling indicates that Treasurer Estes’ concerns about the budget were justified.
The Board of Education was represented by Paul Porter of Cromer Babb Porter & Hicks, LLC in Columbia and attorney Bruce Davis. Paul Porter commented, “I am glad about the Court’s decision, and I commend my opponents on a well-tried case. It is my hope now that all involved work together because that is what is best for Dillon County.”
Dillon County had 10 days in which to file a motion to reconsider or 30 days to appeal; however, at a called meeting on Friday, the Dillon County Council voted not to appeal the ruling in a 4-3 vote. Voting not to appeal were Councilman Harold Moody, Councilman Stevie Grice, Councilman T.F. “Buzzy” Finklea, Jr., and Councilman James “Hoghead” Campbell. Voting to appeal were Councilman Robbie Coward, Chairman Archie Scott, and Councilman Jack Scott.
Highlights From
The Judge’s Order
The Budget
“The court finds that the County 2017-2018 budget was initially passed unlawfully as it did not provide public notice of all amendments. …However, the Court also finds that the County’s supplement 2017-2018 budget was valid in its passage.”
The Will Of The Voters
“A LOST is a tax authorized by the voters, and the Court finds that the County cannot assume the Board’s historic share of LOST revenues without compromising that authorization. See, S.C. Code Ann. 4-10-20. A majority of Dillon County voters approved a local option sales tax in 1995. The record reflects that Dillon County publicized to voters that proceeds from the County Revenue Fund would be split between the County and the Board. Trial testimony also persuades the Court that the split in funds between the County and Board was determinative in the passage of the 1995 LOST Referendum. … The Court views the public advertisement describing a split in tax funds between the Board and County, the County’s September 1, 1995 meeting notes, contemporaneous Dillon Herald articles, and the testimony of firsthand witnesses as indicative that the manifest purpose of the 1995 LOST Referendum was to have County LOST Revenues divided evenly between the Board and County. Therefore, County Council cannot subsume the Board share of LOST revenues without annulling the wishes of its voters.”
Findings
“The Court finds that the agreement between the two parties that the County’s portion of LOST monies between the Board and County was made expressly known to the voting public who approved the 1995 LOST Referendum. The County, in the absence of a superseding referendum, cannot breach the understanding of its voters with respect to how the LOST funds would be allocated. Therefore, the Court declares as a matter of law that Dillon County’s attempt to allocate LOST funds into its own budget that were historically paid to the Board is unlawful. Furthermore, the Court enjoins the County from future actions inconsistent with this opinion until a superseding or rescinding referendum is approved by the voters.” ….
“The Court also finds that even if the County could allocate Board LOST monies, without respect to the will of the voters, that such conduct would amount to an unlawful breach of contract with the Board. A contract is breached when one party to the contract fails ot properly perform the terms of the agreement.” …
“Dillon County made an unambiguous promise to the Board, through authorized representatives (its Council and Administrator), that if the Board assisted in the passage of the LOST referendum, the Board would share evenly in the proceeds from the LOST. That promise is enforceable.”
NETC
Defendants Northeastern Technical College and Berry have settled their disputes regarding a reduction in millage to the College in the 2017-2018 budget.
CONCLUSION
The Court finds that the Dillon County’s attempt to budget LOST funds
historically allocated to the Dillon County Board of Education was unlawful. The Court declares that the County share of Local Option Sales Tax revenue funds should be distributed in halves between the Board and County. This declaration is made in accordance with the agreement reached in 1995 between the County and the Board that was affirmed by the voters in the 1995 General Election. The Court enjoins the Dillon County from conduct inconsistent with this opinion.
IT IS SO ORDERED.
