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Dec 5, 2023: 526 | Sales Tax Referendum in 2024
The State Joint Bond Review Committee voted today to approve $75M in matching funding for the Mark Clark Extension (aka 526). The funds are be used for the completion of right-of-way acquisitions and permitting.
The next step will be a November 2024 ballot referendum for a half-cent transportation sales tax to fund this and other projects.
Passage of the referendum is uncertain (see this editorial), especially when one considers that:
- The last transportation sales tax referendum in 2016 passed with only a 51% majority. With this narrow margin, it likely would have failed if it had included the Mark Clark Extension in the list of projects.
- Progress on projects funded with previous referendums has been very slow and some projects listed in previous referendums are not being worked on at all. This all leads to a lack of public faith in the process.
- Charleston taxpayers would pay for the bulk of the construction of a State road. As stated by State Infrastructure Bank Chairman John White, shown in the graphic above, the State is pleased at this outcome.
- Despite our tremendous growth and the resulting increase in the tax base, Charleston County, along with Dorchester and Horry Counties, has the highest sales tax rate in the state. Note that a proposed 2024 half-cent transportation sales tax would not increase our taxes, only replace another tax that is sunsetting.
Continue reading to learn about referendum alternatives and about details on the Charleston County transportation sales tax.
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There are two referendum alternatives Charleston County Council should seriously consider.
The first alternative is to have two quarter-cent sales tax referendums rather than a single half-cent sales tax. One quarter-cent would be for the Mark Clark Extension and the other would be for all other road projects, mass transit, and greenbelt programs.
Some on Council may say they will not do this because it would invoke “sectionalism”. But as SCDOT project manager Jay Mattox said “This is not a project for James Island or Johns Island or West Ashley — it’s for the region as a whole.” If this is indeed the case, then the region as a whole (or at least all of Charleston County) should want this project to proceed and sectionalism would not be an issue.
The second alternative is to limit the duration of the tax, to perhaps 7 years. This will allow a better focus on a timely completion of the most needed projects, provide assurances to County residents that their taxes are being well spent, and allow the County to better adapt to changing transportation needs (no one can accurately forecast road needs for 25 years out!).
Some in the County may say that a few projects may take longer than 7 years to complete. This issue can be addressed by breaking projects into phases. For example, in one referendum a project could be funded through planning, right-of-way acquisition, and permitting. The subsequent referendum could then fund project construction.
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Charleston County Transportation Sales Tax (TST)
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Background:
The statewide sales tax rate is 6%. In Charleston County we pay an additional 3% tax rate, for a total of 9%, as follows:
According to the SC Department of Revenue, only three counties -- Berkeley, Charleston and Horry Counties -- have a 9% sales tax rate. The other 43 counties have lower tax rates.
Current Transportation Sales Taxes:
2004: In a 2004 referendum Charleston County residents approved a half-cent transportation sales tax. The tax will collect $1.3B over a period not more than 25 years to be spent on roads and mass transit.
The County has said they expect to reach the maximum amount of allowed collections as early as 2026 or 2027.
2006: Subsequently, in a 2006 bond referendum residents approved the use of some of those funds for various road improvements, including "Maybank Highway widening from proposed I-526/Mark Clark interchange to Bohicket Road/Main Road".
Maybank Highway was not widened despite this having been specifically listed in the bond referendum.
2016: An additional half-cent transportation sales tax referendum in 2016 narrowly passed by 51%. Many believe it only passed because County Council did not include the Mark Clark Extension (aka 526) in the list of projects to be funded.
The tax will collect $2.1B over a period not more than 25 years for roads, mass transit, and greenbelt programs. Greenbelt programs were allocated 10% of the total ($210M).
The list of road improvements included "US 17 at Main Road flyover and widening Main Road from Bees Ferry to Betsy Kerrison with Parkway type section at Bohicket“.
County Council has decided not to fund improvements to Main Road from River/Chisolm Roads to Maybank Highway despite this having been specifically listed in the bond referendum.
Proposed 2024 Half-Cent Transportation Sales Tax:
County Council has said they will propose another half-cent transportation sales tax referendum in 2024. The tax would be for $5.4B and would last up to 25 years. The tax would be for roads, mass transit, and greenbelt programs.
This tax would replace the 2004 half-cent sales transportation tax when that tax sunsets. Therefore, there would be no net increase in taxes.
The previous 2016 transportation sales tax includes funding for mass transit and greenbelt programs. Therefore, regardless of the outcome of the 2024 referendum, these efforts are funded well into the 2030's unless County Council decides to defund them.
The timeline for the referendum is:
- June 2023: Staff engagement with BCDCOG, SCDOT, City of Charleston, City of North Charleston, Town of Mount Pleasant, and the Town of James Island
- Late Jan 2024 to end of Feb 2024: Public meetings in North Charleston, West Ashley, Johns Island, James Island, Mount Pleasant
- Nov 2024: Ballot referendum
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