Court to rule on property tax re-billing, refunds

COLUMBIA -- Everyone agrees that Charleston County created confusion with its property taxes three years ago. Now, the S.C. Supreme Court must figure out how to make things right. Specifically, the justices must decide who should get refunds on their property taxes, how much those refunds should be and whether homeowners who got a break on 2001 tax bills should be charged more to pay for the refunds. "We're asking, in a sense, for guidance from the court," said attorney Dawes Cooke, who helped County Attorney Joe Dawson with one of two related county tax cases that were argued Tuesday before the Supreme Court. During its 2001 tax reassessment, Charleston County capped the value of owner-occupied homes at 15 percent, so many homeowners got a break. Owners of cars, vacation homes, stores and other property paid more. The Supreme Court already ruled this approach was illegal, and the question before it Tuesday was what to do about taxpayers who paid too much that year. Circuit Judge Victor Rawl ruled that homeowners who benefited from the cap should keep that benefit, and the county should find the $9.8 million for refunds on its own. Cooke said it would be more equitable for the county to send out new, corrected tax bills for 2001. Associate Justice Costa Pleicones questioned why the county had not already sent out new bills, adding, "The county lacked the political will to do it themselves, and they wanted the court to do it." Associate Justice E.C. Burnett said, "It just baffles me that the county would not take hold of that opportunity to rectify that mistake. To me, it's pretty simple. You just didn't do so." Cooke said county officials did not send out new bills because they were not sure that would be legal. "A total re-bill is revenue neutral. It puts everybody back where they should be," Cooke said. "The alternative is to pay refunds. It's a one-way street. Where is that money going to come from?" Trenholm Walker, who represents some 90,000 taxpayers in a class-action lawsuit, said the county recently sold a parking garage, and that it has money on hand for the refunds. "It's no problem. Their bond rating is great," he said. Also at issue Tuesday was whether the taxpayers who paid too much in 2001 had exhausted their administrative appeals before going to court and whether the county should pay the plaintiffs' attorneys fees. "We believe the award of attorneys' fees is improper," Dawson said. Council Chairman Barrett Lawrimore didn't attend the hearings but later said he hoped the Supreme Court would ask the county to send out new bills rather than provide refunds. "Council made an honest mistake. We didn't do it intentionally," he said of the 2001 bill. "The fairest thing to do would be to re-bill, and those that got the benefit come up with the money to pay the others back." The second case involved the Hoefer family of Columbia -- five individuals, a family limited partnership and a family trust that owned 10 properties in Charleston County -- who seek a higher level of refund because they paid their 2001 taxes under protest. "Even if the court were to rule in our favor, this case only involves involuntary taxpayers," said attorney and family member John Hoefer, adding that the county's cost would be about $40,000. "It would have absolutely no significant financial impact on the county." Chief Justice Jean Hoefer Toal recused herself from the hearings because she is related to the plaintiffs in one case. Judge James Moore presided, and Circuit Judge John Ernest Kinard joined the court to fill in for Toal.

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