A bill supported by Habitat for Humanity and your Home Builders Association will exempt building materials purchased by the charity, and other similar charities, from sales tax.
H.3568, sponsored by Rep. Garry Smith of Simpsonville, was signed by Governor Haley earlier this month. It is expected to save Habitat about $5,000 a month and result in enough savings over the course of a year to result in the construction of one additional new home each year in Greenville County alone.
Your Home Builders Association is in support of the referendum on the Penny Sales Tax for Roads in Greenville County. The Board of Directors supports the referendum because it is a broad-based funding solution for a problem in our county that affects everyone. More specifically, however, it impacts home builders. During the last year, local governments have denied approvals to several new subdivisions because of traffic concerns. Our county’s inadequate roads do affect home builders and will continue to if a solution is not found to repair our roads.
Below are some facts about the referendum from Citizens for a Better Greenville, a coalition your Home Builders Association joined to support the referendum question:
“County Council can change the list of projects to whatever it wants.”
This is false. This comes from a very erroneous reading of the ordinance. The County Council operates on a 2-year budget, so every two years of the 8-year lifetime of the tax, the Council will have to approve a list of projects. The current Council cannot bind the next Council. But, the ordinance goes on to say that the language “shall not” mean the Council can deviate from the detailed list of projects approved by the voters. It only means that the next Council can set priorities from within the project list approved by the voters.
“The state has the money to repair the roads.”
This is false. If you drive 15,000 miles a year, and get 20 miles per gallon, you pay enough gas tax to pave 7 feet of road. Our state has 216 million feet of state road. The state’s plan for roads, based on current funding, has resulted in 70 percent of our roads receiving a rating of “poor,” and at the current rate, some Greenville County roads will not be repaved until 2097. Clearly, the existing gasoline tax and other funding for our roads is not enough.
“Only 4 cents out of the 16 cents in gas tax returns to Greenville County.”
This is false. The numbers do not lie, but the opposition does. From 2002 until 2011, drivers bought 2.2 billion gallons of gasoline in Greenville County, and paid $353 million in taxes on that gas. Greenville County received $567 million in funded road projects from the Department of Transportation. We actually received 27 cents in projects for every 16 cents in gas tax Greenville County sent to Columbia. This rumor is rooted in the fact that 4 cents of the 16-cent gasoline tax is dedicated to a program for maintenance of county- and locally-maintained roads. However, only 30 percent of all roads in the state are maintained by counties or cities. The rest are maintained by the state. It is only fair for the state to receive the largest portion of the gasoline tax that drivers pay. Even so, the state spends their funds where the needs exist. The fact that Greenville County has received a larger share than it contributed speaks to the need to repair and maintain our county’s roads.
“It will be a $300 tax burden on Greenville families.”
This is false. According to Clemson University, it will cost an additional $119 per household. To cost an additional $300 per year, a family would have to spend $30,000 a year purchasing taxable items. The average household income in Greenville County is only $42,000. That claim is patently ridiculous, since most of our income goes to housing, electricity, water, gasoline, and other items not subject to the sales tax.
“Not all of the money will be spent in Greenville County.”
A shred of truth. It makes for a nice talking point, but only a tiny fraction of the money collected will be held at the Department of Revenue as a fee for the service of collecting the tax and remitting it to the county. More than 99 percent of the money will flow through the Department of Revenue, the agency that collects sales tax, and sent to a special account at Greenville County.
“This will cost Greenville County taxpayers $65 million a year.”
This is false. Clemson University and other researchers have studied whom will pay the tax. Their research shows that as much as 30 percent of the revenue will come from people who live outside our County. And the average annual cost of the tax will be about $8 million per year. What really costs Greenville County taxpayers is the more than $250 a year that DOT estimates we spend in maintenance on our cars due to poor road conditions.
“This tax will apply to groceries.”
This is true, for now. When County Council approved the referendum, it selected a method that restricts the collection and use of the tax proceeds and binds future Councils to the decision made by the voters on November 4, if they approve the referendum. County Council modeled the program based on NOT taxing groceries. Unfortunately, it did not become apparent until later that the method selected requires that the tax be collected on groceries, a holdover from an era when the statewide sales tax did apply to groceries. County Council, the Greenville County Legislative Delegation, and Citizens for a Better Greenville have all committed to seek legislation when the General Assembly returns in January to exempt groceries from the proposed one-cent sales tax. The effective date of the sales tax, if approved by the voters, is not until May 1. So there is plenty of time to change the law.
UPDATE May 7, 2014:
County Council gave first reading to an ordinance to place a question on the ballot in November for voters to decide whether to increase the sales tax by one penny in Greenville County to pay for road projects. President Mike Freeman, GMB, and Government Affairs Chairman Coleman Shouse spoke in support of letting the voters decide.
The vote in Committee of the Whole was 8 to 3, with council members Cates, Dill, and Meadows opposed. County Council has one vacancy that will not be filled until the first council meeting in July.
A public hearing is planned for June 3. Two additional readings and votes are required for the ordinance to pass.
The Board of Directors of your Home Builders Association is supporting an effort to allow the voters of Greenville County to decide whether they would like to impose on themselves a special local option sales tax for road improvements and resurfacing, bridge repair and replacement, and pedestrian facilities improvements.
A task force of 20 citizens from around Greenville County, appointed by County Council and called the Greenville Citizen Roads Advisory Commission, studied the county’s transportation infrastructure needs over the course of three months beginning in January. They presented their report to County Council in late March and recommended nearly $700 million in critical funding needs including $300 million for road resurfacing and $40 million for bridge repair and replacement. The commission held several public meetings throughout the county and received reports from every city, county staff, and the Department of Transportation. Their report
Based on the current funding stream, it could take decades to complete all of the projects that have been identified, and that assumes that no new needs arise, which is unlikely.
“The association will generally support a broad-based funding measure to fund critical infrastructure needs that are well-thought out and presented,” Michael Dey, Executive Vice President of the Home Builders Association, said. “In this case, the commission thoroughly researched Greenville County’s needs and developed a sound proposal of needed repairs and improvements,” Dey said. “The Board of Directors is supporting giving the voters of Greenville County the opportunity to make the choice, which is the method provided for in state law. Of course there were lots of other suggestions for paying for our road needs, including and impact fee on construction, or a tax on the transfer of real property. A broad-based solution will best solve this problem,” Dey said.
The first step is for County Council to agree to allow the voters to decide whether they would like to tax themselves. A poll conducted by the National Association of Realtors, released this week, found that 83 percent of 400 likely voters in Greenville County want to have the chance to vote in a referendum and decide whether they would like to tax themselves to pay for critical transportation needs. The process starts May 6, when County Council will consider on first reading a referendum to place the question on the ballot in November.
The one-cent sales tax, if approved, would last 8 years and is expected to raise about $680 million. Note: if voters approve the project list and tax, no governmental body can alter the list of projects funded by the special tax.
To read more on the proposed transportation improvements at GreenvilleCounty.org, click here.