What would it cost to become a town?

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Jury still out on tax cost

By Reece Murphy

Of all the issues in the Indian Land incorporation debate, none sits closer to the heart of the matter for most Panhandle residents than the issue of taxation.
With a little more than two weeks left until the March 27 referendum, many voters simply want to know the answer to two basic questions before they decide: How much will it cost and what will it buy me?
The answer is, there’s no way to know until after the decision is made.
If residents decide to incorporate, the new town of Indian Land’s first town council will decide the answers to both questions.
The situation is unlike most other major life decisions.
In many ways, the decision to incorporate is akin to buying a house unseen, depending only on the sales pitches and descriptions of the contractors, who say it will be moderately priced, though they’re unable to provide certified documentation to prove it.
It could turn out the house is a hastily built ranch, or a plush move-in-ready mansion – but you’ll never know until after you buy it and it’s built.
Municipal Association of South Carolina Field Services Manager Jeff Shacker expanded the analogy by saying it must be something like planning and having a tract house built.
“Some people are much better at looking at drawings or looking at footings and seeing what it’s going to look like,” Shacker said. “Others, they look at it and think, it doesn’t look like I imagined it, and then they have to start going through change orders to make it the way they envisioned it.
“I tell you what (incorporation) does do, it underscores the importance of how representative democracy works and the importance of being involved in the democratic process,” Shacker said.
In this, the fourth and final article in a series looking at Indian Land incorporation, we’ll take a look at each side’s claims about taxation, and straighten out a few claims.
Current taxes
The proposed town of Indian Land encompasses about 58 square miles of the Lancaster County Panhandle and has an estimated population of somewhere between 28,000 to just over 30,000 residents.
Panhandle property owners, like all other property owners in the county ¬– rural or urban – pay county taxes. Tax bills for county property owners, based on a $49.7 million budget with a millage rate of 317.6 mills, minus school and local option sales tax credits, amount to about $900 on a home of median value in the county of $150,200.  For the median home value in Indian Land – $283,000 – the county tax is $1,895.
Panhandle residents north of S.C. 5 in the Van Wyck area also pay an annual $60 stormwater fee on their homes for a federally mandated stormwater district, while residents in the Pleasant Valley and Indian Land fire districts pay another annual $90 per home fee to support their fire departments.
Panhandle residents in the Brookchase, Sun City Carolina Lakes and Walnut Creek developments pay additional infrastructure bond assessment fees that vary annually.
Voters for a Town of Indian Land (VTIL)
Incorporation organizers Voters for a Town of Indian Land (VTIL) say the answer to the two key questions is that a town of Indian Land will cost citizens very little and buy them everything as town residents – the right to control their own destiny.
The group proposes a small government with a minimum of services, paid for with a small budget of $7.7 million paid for with low property taxes and existing state and local tax revenue streams and fees.
During a March 6 presentation and town hall-style meeting at the CrossRidge chapel, attended by about 45 people, VTIL Vice President of Public Affairs Matt McCusker pointed to several new cities in Georgia as proof that the small-government approach works.
Several of the new municipalities, including Peachtree Corners, Stonecrest and Tucker, Ga., have similar or larger thriving populations with similar budgets and no property taxes.
“This is a trend. A new way to create cities,” McCusker said. “It doesn’t have to be a bloated bureaucracy. Some of these towns have larger populations and lower budgets than us. This trend is happening across America.
 “A lot of times I’ve heard anti-town people … compare us to Aiken. Aiken is a 100-year-old city that is not managed well at all and has a lot of debt problems,” he said. “They’ve had a hundred years to grow and create many, many departments, and many, many layers of government.
“These (the new Georgia towns) are the perfect comparison. These little towns are just like us. “
VTIL’s budget proposes contracts with Lancaster County to pay for the bulk of the town’s most expensive services, such as law enforcement, fire protection and road maintenance, and calls for the town to provide planning and zoning, code enforcement and parks and recreation.
VTIL proposes an extremely small millage rate of 12.2 mills amounting to, they say, about $49 a year for a $100,000 or $122 a year on a $250,000 home.
For the median home value in Indian Land – $283,000 – VTIL’s 12.2 mill tax would be $138.
The town’s remaining revenue would come primarily through existing sources available to municipalities, such as the local option sales tax, the state’s local government fund money, personal property taxes and Indian Land hospitality taxes, called a “hospitality fee” in VTIL’s proposed budget.
Other proposed sources include building permits, business and franchise fees and recreation fees, with an 8 percent reserve for uncollected taxes, would bring the total revenue in the proposed town of Indian Land’s budget to $7.8 million, VTIL says.
Revenue sources like building permits, hospitality taxes and business and franchise fees would grow with the construction of new businesses at mega-shopping centers like RedStone and the Promenade.
The local option sales tax, or LOST for short, would both lower Indian Land municipal property taxes through the town’s newfound access to local option tax rollback funds, and boost the budget through access to local option revenue funds.
Using one of VTIL’s primary arguments for incorporation, one that plays on the division between the northern and southern parts of the county, McCusker said incorporation would end use of Indian Land as a cash cow for the rest of the county.
“Becoming a town means we get to keep millions of our own dollars, alright, that currently doesn’t only go to the county, but they also go to other town’s budgets,” he said. “We subsidize other towns’ budgets. We’re building a wall at (S.C.) Highway 5, alright, and stopping the money.”
VTIL pushes back assertions by opponents that once incorporated, taxes could “explode,” by citing S.C. Act 388, which limits the amount a town council can raise taxes to 3 percent a year.
“The goal was the idea to put a cap so the rising of taxes didn’t outpace inflation, alright?” McCusker said. “This has been the law for over a decade.”
Citizens Against Indian Land Incorporation (No Town)
No Town effort organizers Citizens Against Indian Land Incorporation, dismiss most, if not all, of VTIL’s budget and taxation claims out of hand.
To No Town proponents, the answer to the questions of how much it will cost and what will it buy is: too much and nothing better than what you’ve already got.
“If incorporation were to pass, Indian Land would not receive any new services from their new municipal government,” Citizen leaders say in their presentations,  “but they would be taxed for the same services that their county tax dollars currently supply.
“County taxes will not go down. This is a new layer of government, and new taxes, but no new services.”
In a town hall at Osceola United Methodist Church the same night as VTIL’s town hall, before a crowd of about the same size, Citizens presenters repeatedly took VTIL to task for its budget.
“So, anything in the proposed budget, 100 percent of it, is nonbinding,” Citizen leader Mike Neese said. “A new town council will create that, as well as they’ll create the millage rate.
“That’s something that is very important to remember as we go forward. You’ll see how it’s grossly underestimated,” he said.
Neese made the case for an associated No Town talking point that says VTIL’s proposed 12.2 millage rate is as underestimated as its proposed budget.
The assertion hangs on a comment by reported municipal tax expert Arthur Guerry, former Gov. Nikki Haley’s appointee on the Joint Legislative Committee on Municipal Incorporation.
In a video recorded during VTIL’s appearance before the committee, Guerry said he believed, based on the Panhandle’s assessed value at the time, that VTIL’s millage rate needed to be much higher.
 “I will assure you without a shadow of doubt as I’m sitting here, your millage rate as proposed in your budget is so undervalued I don’t think the citizens understand that you’re going to have to shoot those mills up at least 80 mills on top of what you got right now, at a bare minimum,” Guerry said.
“At a bare minimum,” he repeated. “I’m looking at more like 110 is what you’re going to have to kick those mills up to.”
With that, Neese presented new property tax estimate amounts based on Guerry’s millage rates, though for clarity’s sake, Carolina Gateway is using the same home value VTIL used in its presentation.
According to Guerry’s assertion, the town tax on a $100,000 home would run $320 at 80 mills and $440 at 110 mills. For a $250,000  home, the tax would be $800 at 80 mills and $1,100 at 110 mills.
For the median home value in Indian Land – $283,000 – the tax would be $906 at 80 mills and $1,245 at 110 mills.
“I think Arthur Guerry was pretty clear what he was talking about,” Neese said.
Neese said that even though VTIL members claimed the Joint Legislative Committee approved their budget during the petition approval process, the budget has never been “approved.”
Neese said Aiken, with a $24.8 million budget adjusted for similar services, was a better comparison to Indian Land than the Georgia cities, but spent more time comparing VTIL’s proposed budget to Sun City Carolina Lakes’ budget.
“Sun City, right up the road here, they have 6,000 people living there, 1,200 acres,” Neese said. “Their budget is $8.1 million.
“So let’s put that in perspective, we’re going to have a town of 55 square miles, 25,000-plus residents and one of our HOAs has a larger budget?” he said. “I get it, Sun City pays for mowing and pine straw and everything else, but the bottom line is, government only goes one way and that’s upward.”
Referring to VTIL’s argument that, yes, taxes can go up, but only by a rate of 3 percent a year, Neese said, “The only catch is they don’t tell you is where you start at.”
The facts
As with some of the earlier issues, it is near impossible to prove or disprove many of the assertions made by both sides of the taxation issue, due to the number of unknown variables.
For example, while the trend of minimal service, no- and extremely low-property tax municipal governments in Georgia certainly seems to be working well now, how sustainable they will remain in the long run remains to be seen.
Another example is Guerry’s assertion about VTIL’s millage rates. While he swears that it won’t work at 12.2 mills, it could. Only time will tell.
There are a few common arguments on the topic that are outright incorrect, and others that require clarification, some both.
McCusker made several shaky arguments in a row while listing tax grievances against the County Council during his presentation at CrossRidge.
Starting with a complaint about the council imposing a 2 percent hospitality tax, McCusker says, “If we become a town, at least Indian Land gets to keep half of it.”
The argument is misleading because it seems to imply that the hospitality tax is only on Indian Land residents, since “Only in Indian Land” is a refrain throughout the argument. But the hospitality tax covers the entire county.
According to Shacker and Lancaster County Administrator Steve Willis, to receive any of the funding at all, Indian Land’s town council would first have to approve its own town hospitality tax.
The amount the county received from the tax over the previous 12 months would then be frozen, and the town would have to reimburse it for that amount on those businesses.
The town would keep anything over that amount, which could increase as the businesses grow. The town would also get to keep all of the hospitality taxes on businesses that opened after its hospitability tax began.
McCusker goes on to say council raised fire protection fees, “Where? Only in Indian Land.”
The fact is County Council approved the Pleasant Valley and Indian Land fire district fee board’s own requests to raise the fees $15 a year from $75 to $90 for more firefighters and capital purchases.
McCusker also said the county is charging “$80 a home” for stormwater fees with “suggestions they may be lowered to $70 or $65,” only in Indian Land. While the fees are only in the Panhandle, the fees are actually $60, and he failed to mention they were federally mandated.
McCusker is also often unclear, though not necessarily wrong, in his discussions of LOST funding, but fails to clarify the difference between the tax rollback and revenue sides of the equation. The tax rollbacks are credits that will go directly to town of Indian Land municipal taxpayers, not the town’s coffers. 
No Town also makes some claims that don’t square. For example, their entire discussion of Sun City Carolina Lakes’ budget and taxes doesn’t consider that many residents qualify for homestead exemptions.
They were right, however, that the Joint Legislative Committee didn’t approve VTIL’s budget. The committee only certified that the group had met all the requirements in the law to hold a referendum on the matter and moved it on to the Secretary of State’s Office.
More than with any other issue in the incorporation debate, the choice of whether to believe the proposals and dire warnings of either side requires a significant measure of faith.
In the end, none of the talk matters. What’s important is that all eligible voters in the proposed Indian Land incorporation area, from the state line to the north all the way down to the North Corner Boundary Stone, participate by voting.
For details on services in VITL’s proposal, visit www.TownOfIndianLand.org, then click on “The Vision” tab, scroll down and click on “Download the Incorporation Package.”
For details of Citizens Against Indian Land Incorporation’s position, visit NoTownOfIndianLand.org and click on “Download our presentation…” and “Download the presentation transcript.”

Absentee voting now open

The Indian Land incorporation vote will be March 27.
Registered voters may request absentee ballots or vote in the Lancaster County elections office at 101 N. Main St., Lancaster. The office is open 8:30 a.m.-5 p.m. Monday-Friday.
Only Panhandle residents outside the Van Wyck town limits are eligible to vote. The proposed boundary runs from the northern tip to S.C. 5 south of Van Wyck, then along U.S. 521 to East North Corner Road to the state line.
All Panhandle polling locations will be open 7 a.m.-7 p.m. March 27.
For details on absentee ballots, visit the Lancaster County elections office, call (803) 285-2969 or email MAHudson@lancastercountysc.net.