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ScribeBy: Arlie Porter of The Post and
Courier Staff
Originally Published on: 3/21/03
Page: B1
Despite lawsuit, cap will be calculated in next year's tax bills
Charleston County Council members voted to proceed Thursday with a controversial reassessment cap, a decision that will result in most homeowners paying higher property taxes this year.
With the cap, which faces a court challenge, the owners of 82,000 residential and commercial properties will pay higher taxes, while 53,000 will pay less, according to county figures released Thursday.
Because the cap limits the increase in a property's value that can be taxed, the greatest beneficiaries are owners of commercial properties and homes that increased the most in value during the 1990s. For the most part, these are properties in beach and resort communities and in downtown Charleston.
Saks Fifth Avenue, the upscale department store in downtown Charleston, for example, will get an estimated $115,000 property tax break under the cap. Because this and other large commercial enterprises would pay less taxes, most homeowners and commercial property owners would pay more when tax bills are mailed in the fall. Taxes on more than 300,000 cars also would be higher with the cap than without it.
Councilman Curtis Bostic, a leading cap supporter, said the cap is fundamentally fair. Owners of rapidly appreciating properties should not have to pay higher taxes for the same level of county and city services than what the owners of less valuable properties get, he said. And while most homeowners will pay higher taxes, it should amount to only a few dollars more because the cost of the cap would be spread out over so many, he said.
The city of North Charleston doesn't think so. Saying that the majority of its residents will pay higher taxes with the cap, City Council has sued. The lawsuit is pending before the S.C. Supreme Court, which has ruled an earlier version of the cap illegal.
Following the high court's ruling last year, council voted to enact a different cap this year. Rather than extend the potential tax break to only owner-occupied homes, as the previous cap did, the new cap also makes commercial properties eligible.
This means most homeowners would pay higher taxes, while commercial property owners would get the largest tax breaks, according to the county assessor figures.
Worried that the Supreme Court could rule the new cap illegal, and faced with a daunting challenge to pay refunds to taxpayers because of the earlier, illegal version of the cap, County Administrator Roland Windham recommended Thursday that the cap be postponed until next year. That would provide enough time for a court to rule whether it's legal.
Following a meeting behind closed doors, and without public discussion, council members ignored Windham's recommendation and instead voted unanimously to spend $75,000 to program computers to calculate the cap in this year's tax bills.
Short of a Supreme Court ruling against the cap, it will take effect this year, Bostic said after the meeting. It's unclear, however, when the court will rule.
The county has until mid- to late July to change tax bills without a delay in mailing them in late September, Bostic said.
Faced with that possibility, the county intends to notify all 17 county municipalities that tax revenues they rely on to operate might be delayed early next year.
Council members, meanwhile, took no action on a court order that they notify about 85,000 property owners that they may be due a refund from being overcharged by the earlier, illegal cap.
If the new cap is enacted as council proposes, and the Supreme Court later rules it illegal, the county and all governments could have to refund taxes a second time. To get the refund money, the county and all governments would charge higher taxes.
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