Supreme Court Ruling May Have Negative $975,000 Impact On County Budget

By Betsy Finklea
The Dillon County Council may not have passed a budget at their special meeting on June 30th, but it may have worked out for the best.
A South Carolina Supreme Court ruling issued that same day declared that “the road maintenance and telecommunications taxes are invalid under state law. (Opinion No. 28401)”
In Dillon County, the road maintenance fee is the $40 fee on your vehicle tax notice. The loss of road maintenance fees alone could have an approximately $975,000 negative impact on the county’s budget. This is the equivalent of approximately 15 mills.
The opinion stated that the “charges are taxes” and further stated that “State law prohibits local government from imposing taxes unless they are value-based property taxes or are specifically authorized by the General Assembly.”
This ruling could put county governments across the state in difficult predicaments causing counties who have passed their budgets in a situation where they will have to reconsider and amend their budgets. For counties like Dillon, who have not passed their budgets, these counties will have to seriously re-evaluate their proposed budgets due to the loss of large amounts of funds generated by these fees.
Due to the huge impact that this could have on county budgets statewide, the General Assembly could call a special session to authorize the fees. However, should this fail to happen, counties including Dillon, will have to figure out how to offset the loss of these fees. Possibilities include large cuts to budgets; increasing property taxes to the maximum limit allowed by Act 388, which determines how much counties can raise taxes; significantly cutting services; and taking other cost-saving measures.
There is also the question that if the ruling stands whether or not the fees already paid this calendar year (around $500,000 in Dillon County) would have to be refunded, which would further impact the budget. Some counties have been collecting these fees since the 1990s.