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ScribeBy: James Scott of The Post and
Courier Staff
Originally Published on: 2/14/03
N. Charleston to sue Charleston County over reassessment cap
North Charleston City Council voted 10-0 Thursday to challenge the county's reassessment cap, launching a precedent-seeking lawsuit that is expected to head directly to the state Supreme Court and ultimately affect how much taxes people pay later this year.
Charleston County officials have hoped for such a lawsuit, reasoning that only a clear ruling by the court will resolve the questions surrounding the county's second attempt at a reassessment cap.
Both sides would like a decision on the suit before tax bills go out in the fall.
In explaining their vote, City Council members returned to their oft-quoted argument that the cap shields residents in downtown Charleston and in the beach communities from rising taxes while sticking North Charleston with the tab.
"We think the cap is not a fair taxation method," said Mayor Keith Summey. "We believe the system that has been developed, the one we have been going by for years, is a fair and equitable system. Now, because it is beginning to negatively affect some areas, some people want to change the system."
Thursday's vote for a lawsuit set in motion yet another chapter in the ongoing saga over the county's convoluted tax system.
The cap, which once limited property value increases on owner-occupied homes to 15 percent in a reassessment year, meant homes that appreciated rapidly got a tax break. As a result, owners of homes that did not increase as much in value, and owners of commercial property and second homes paid a relatively higher tax rate.
The state Supreme Court ruled last year that capping only owner-occupied homes was illegal, prompting the county to extend it to all property owners.
Because of that ruling, a lower court decided earlier this month in a separate case that the county could face millions of dollars in refunds to about 85,000 property owners who paid higher taxes. The county has vowed to fight that decision.
Word of the lawsuit by North Charleston city leaders came as no surprise to County Council Chairman Tim Scott. He said Thursday that he hoped the lawsuit would give the courts a chance to test the constitutionality of the new universal cap, letting the county know whether it's safe to move forward before tax bills go out this fall.
The universal cap would limit the increase on all reassessed property, including homes, stores, offices and rental property. The first cap, ruled unconstitutional, limited the increase only to owner-occupied homes.
"We have been waiting on the suit for months," said Scott, who is one of three council members from North Charleston. "We are hopeful that the state Supreme Court will have mercy on us and hear the case quickly and render swiftly a decision."
Even a universal tax cap will push more of the actual tax burden to those property owners whose assessment didn't rise by much. According to information provided by the city's legal department, roughly 97 percent of 67,282 taxable properties in the city, from cars and boats to homes and businesses, will face higher tax rates if the cap is put in place.
City Attorney Brady Hair, who has requested the case go straight to the Supreme Court, said the cap's effect goes beyond hurting North Charleston. About 89 percent of 497,320 taxable properties countywide, he said, will face higher taxes if the cap is approved.
"It is the most unfair legislation geared toward helping a few at the detriment of others that I have ever seen," said Hair, who plans to file the 23-page suit immediately. "It is tremendously unfair, not only to the vast majority of all the people in North Charleston, but we also believe to the vast majority of Charleston County residents."
Hair said if the matter is not resolved before the next round of tax bills, the city might ask for an injunction to block the bills from going out.
City Council members, who voted last fall on a resolution urging the county not to adopt the cap again, argued Thursday that the cap is a short-sighted and unfair manner of providing tax relief.
"We do need tax relief, but you can't put the burden on the little folks just to give the other people a break," said Councilwoman Phoebe Miller.
Councilman A.C. Mitchum said others on council also felt the cap was illegal. "I don't want to see North Charleston spend taxpayer dollars taking this to court, but if that's what it takes, then I am in favor of it."
Mayor Pro Tem Kurt Taylor, who is an attorney for Charleston County, abstained from voting Thursday.
County Council first passed a cap in 2000, months before properties were to be reassessed to account for the increases in value since the last reassessment eight years earlier. Over that time, property values, especially in downtown Charleston and beach communities, soared.
Because property taxes are based on value, and because the values were much higher, taxes on homes in these communities were expected to as much as double. Council passed the cap after hearing from these homeowners, some who feared being taxed out of their home.
In other business, the council voted 9-2 on first reading of an amended plan to allow the mayor to hand over deeds to about 180 acres of homes, offices and warehouses on the former Charleston Naval Base to the Noisette Co. as part of the 3,000-acre redevelopment project on the city's southern end. It is still uncertain when the handover will take place, based on a hang-up with the federal government.
The appraisal is not finished, but Hair said it's expected to come in at between $9 million and $10 million.
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