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ScribeBy: Arlie Porter of The Post and
Courier Staff
Originally Published on: 3/12/03
Page: C1
A frustrated state judge scolded Charleston County attorneys Tuesday for not having calculated potential tax refunds to as many as 85,000 property owners and said that if they don't, he will.
"Gentlemen, you need to get this resolved," Circuit Judge Victor Rawl said at a court hearing on the county's hotly debated reassessment cap. He paused, then added, "And I mean now."
Last month, Rawl ordered the county to notify as many as 85,000 property owners that they may be entitled to tax refunds from two years ago when the reassessment cap took effect.
The cap limited the taxable value of owner-occupied homes, thus providing large tax breaks to homeowners whose property rose substantially in value during the 1990s, mainly in downtown Charleston and at island communities and resorts.
Because these property owners paid substantially less in taxes, tens of thousands of other property owners paid more.
State law says that property must be taxed at its full value. Rawl ruled the cap illegal about 18 months ago, and the S.C. Supreme Court upheld his decision.
Several dozen commercial property owners later sued the county, claiming they are due a tax refund because they were illegally charged higher taxes when the cap was applied in 2000.
In his ruling last month, Rawl agreed and gave the county 30 days to calculate tax refunds and notify those who would be entitled to receive them.
Attorneys for the commercial property owners, however, complained Tuesday that the county has not done so, in violation of Rawl's order.
County Attorney Joe Dawson asked for more time, saying the county has several questions on how refunds are to be calculated. For instance, what tax rate should the county use and at what point would interest payments added to refunds kick in, he asked.
Trenholm Walker, attorney for those suing over the cap, said the refunds should equal the difference between the higher tax bill property owners got with the cap and the lower bill they would have received if the cap had not been in place.
For the as many as 85,000 taxpayers who paid higher taxes with the cap, the tax refund would range from pennies to tens of thousands of dollars for the owners of large commercial properties, such as shopping malls.
The refunds could total $24 million, forcing local governments to raise taxes substantially or make dramatic cuts in services.
The county has a $9 million "rainy day" fund for a natural catastrophe such as a hurricane. If a refund is ordered and that fund is tapped, lenders could lower the county's bond rating, Dawson said.
And sending taxpayers a seven-page court order notifying them that they may be due a refund could cost the county hundreds of thousands of dollars, Dawson also said.
At one point, Rawl said that if attorneys on both sides can't get together and figure out the refund amounts, he could decide for them.
The county would not like his decision, he warned.
"At some point in time, the court has a problem with patience," he said.
Rawl did not set a new deadline for the county to comply with his earlier order. County Council has appealed his ruling from last month, and it's unclear if any refunds will be sent out while the case is pending - nor, for that matter, what the final result will be.
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Scribe