By Betsy Finklea
A South Carolina Supreme Court ruling issued on June 30th declared that “the road maintenance and telecommunications taxes are invalid under state law (Opinion No. 28401); however, The Herald has discovered that Dillon County’s road maintenance fee was challenged many years ago and at that time was ruled to be constitutional.
On November 14, 1990, court and newspaper records show that Neil C. Lee filed an action against the County of Dillon and then County Treasurer Mary Louise Parham stating that the $10 fee per vehicle was unconstitutional. In 1989-90 fiscal year, the fee brought in $194,410 to Dillon County. Now, in 2021, the loss of the fee, which has increased to $40 per year, could mean a negative -$975,000 impact to budget.
On January 9, 1991, Judge Edward B. Cottingham issued a 25-page order in the case.
According to a 1991 article by R.E. “Bob” Robinson, Jr., this is what happened: Dillon County Council had passed an ordinance decreeing a “County Road Improvement and Maintenance Fee” of $10 be levied against each vehicle registered in the county.
The ordinance stipulated the receipts from the fee be used exclusively to maintain the 350 to 400 miles of dirt roads in Dillon County.
Under protest, Lee paid the $10 fee September 11, 1989, on a 1977 International truck to County Treasurer Mary Louise Parham who was named as a defendant with Dillon County.
Lee then challenged the constitutionality of the ordinance claiming it levied a tax rather than a fee or service charge. This was the nub of the argument.
Judge Cottingham in his order wrote: “…the Dillon County maintenance fee fee is a valid service charge authorized by statute which complies with the statutory requirement of uniformity and the constitutionality guarantees of equal protection and is valid in all respects…”
Stipulated in arguments before Judge Cottingham were the following facts:
-The cost of maintaining the Dillon County roads for the 1989-1990 fiscal year was $316, 499.62.
-The Dillon County Road Maintenance Fee generated revenues of $194, 410 for the 1989-90 fiscal year.
-That the Dillon County tax millage for the 1989-90 fiscal year was 59.
-That one mill produces approximately $28,000 in Dillon County.
-That the overall property tax millage was decreased by 6.75 mills as a result of the Dillon County Road Maintenance Fee.
-That the primary users of the Dillon County maintained roads are the licensed vehicle users of Dillon County.
-That the Dillon County Road Maintenance Fee is accounted for in a separate account although the money is placed in a bank account with other county funds.
Explaining why he ruled the fee constitutional, Judge Cottingham writes:
“…the road maintenance fee is designed as a proprietary fee to reimburse the county for a portion of the cost of maintaining county roads.”
The fee, he continued is imposed on the owners of motorized vehicles, the primary users of the roads.
“I conclude, therefore that Code Section 4-9-30 vests county governing bodies with the power to impose uniform service charges for the maintenance and improvement of county roads such as those imposed by the Dillon County ordinance,” he writes.
County officials will now look into how this will affect Dillon County’s ability to be able to collect the road maintenance fee.
The recently released Supreme Court 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 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, this has not yet happened.
