We had a pretty good crowd, who seemed engaged.
We’ve relaunched the Greater Columbia Community Relations Council’s monthly Hot Topic discussions. Today at the Chamber offices we tackled the subject of Columbia property taxes and their effect on economic development efforts. Or, as local Chamber head Carl Blackstone said when I told him about it, “My favorite topic.”
On the panel were:
- Mayor Steve Benjamin
- Paul Livingston, chairman of Richland County Council
- Henry Baskins, executive vice president, Greater Columbia Chamber of Commerce
- Ryan Coleman, director of ecodevo for the city
- Jeff Ruble, head of ecodevo for Richland County
- Lasenta Lewis-Ellis, president/CEO of LLE Construction Group
We had a good discussion, and will probably have another to follow up before long.
Local businessman Hal Stevenson moderated.
To give y’all some idea of what was said, here are some of my Tweets from during the session:
I’m at the Greater Columbia Community Relations Council’s forum on the city’s tax structure and the challenges it presents for economic development… pic.twitter.com/pASZA6E6il
— Brad Warthen (@BradWarthen) February 8, 2019
Mayor @SteveBenjaminSC says 76.5 percent of city’s land area is tax-exempt. That and Act 388 make for a double whammy on business property taxes in Columbia.
— Brad Warthen (@BradWarthen) February 8, 2019
Jeff Ruble, who handles economic development for Richland County, says many measures taken to lure prospects to the area are a matter of “covering up for bad tax law.”
— Brad Warthen (@BradWarthen) February 8, 2019
And THAT, of course, can and should be laid squarely at the feet of the General Assembly. They passed Act 388. (That’s me talking, not any of the panelists.)
— Brad Warthen (@BradWarthen) February 8, 2019
.@SteveBenjaminSC suggests we need to speak from a position that recognizes our strengths. For instance, in a nod to @CCPColumbia, he notes that Columbia has more restaurants downtown than Greenville does…
— Brad Warthen (@BradWarthen) February 8, 2019
All of that said, the mayor speaks pragmatically when he says that he imagines the chances of the Legislature undoing the damage it did with Act 388 are “slim to none.”
Local attorney Mitch Willoughby chats with the mayor after the forum.
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I imagine nobody in the room was in favor of lowering taxes, right? This is about how to increase revenues I presume.
Also, “more restaurants” doesn’t necessarily mean better… or that downtown Columbia is anything close to downtown Greenville.
No, Doug, it was not. The whole idea for the forum came from Hal Stevenson, a very conservative businessman who shares the concern of the Chamber and others about Columbia’s taxes. But it wasn’t ideological. No antitax or protax bias. Just, what can we do about this problem? The city is squeezed between a small tax base and Act 388, making it hard to provide services and keep taxes down, and that hurts economic development.
By the way, CRC members are appointed by either the city, the county or the Chamber. Hal and I are both Chamber representatives…
There is a case to be made that lowering tax rates could lead to more economic development. Somebody pushed for ACT 388. Who were the main drivers of that bill and what do they say today about the outcome?
The main drivers of that bill were people with rapidly appreciating homes, especially on the coast — or perhaps I should say lawmakers who wished to please people with rapidly appreciating homes, especially on the coast.
There was no strategic thinking whatsoever. It was just an ENORMOUS tax break on homes. It completely relieved homeowners from paying ANY taxes to support school operations (if I remember correctly, the only school taxes they pay now are on capital expenses).
At the same time, the sales tax was raised, ostensibly to offset that revenue.
But what it did was throw a huge portion of the burden on to businesses, and onto renters — because rental property is taxed at the commercial rate. (Basically, a very regressive move, since the working poor now pay more for their rent while also paying higher sales taxes.)
It also limited what local governments could do in terms of raising the taxes to make up for the shortfalls. (Our state lawmakers LOVE to limit what local governments can do.)
Beyond those details, we’ll have to get Cindi Scoppe to ‘splain it. That’s about as far as my memory goes on it, and I might even be remembering some of it wrong…
So what is the fix? Can we lower the sales tax (ha ha ha ha ha) and increase home owner property tax (a death sentence for any incumbent)?
I’d still be interested in knowing WHO drove this. Was this a Leatherman / Harrell gambit?
Here’s the link to the bill:
https://www.scstatehouse.gov/sess116_2005-2006/bills/4449.htm
General Bill Sponsors: Reps. Cotty, Harrell, Merrill, Walker, Ballentine, Limehouse, E.H. Pitts, Haley, Clark, Townsend, Altman, Anthony, Bailey, Bingham, Bowers, Cato, Ceips, Chellis, Clyburn, Coleman, Cooper, Dantzler, Davenport, Delleney, Duncan, Edge, Frye, Hagood, Harrison, Haskins, Herbkersman, Hinson, Leach, Littlejohn, Loftis, Mahaffey, Martin, Phillips, Pinson, M.A. Pitts, Rhoad, Sandifer, Scarborough, F.N. Smith, G.M. Smith, J.R. Smith, Thompson, Toole, Tripp, Umphlett, Vaughn, White, Whitmire, Young, Bales, Lucas, Kirsh, Huggins, Brady, Hamilton, McGee and Stewart
You won’t convince me to increase home property taxes. Property taxes are about the dumbest form of taxation ever devised. You are taxes on what some entity decides the value of your property is — not what you paid for it and disregarding the fact that homes adjacent to each other that receive EXACTLY the same services from the local government pay different amounts. Only a politician could come up with such a convoluted system.
There should be a flat per dwelling fee in each county. That would lead to better government oversight since everyone would be able to determine if they were getting value for their money. And the ease of implementation would eliminate assessors, millage rates (another dumb idea), etc.
“Property taxes are about the dumbest form of taxation ever devised.”
I couldn’t disagree more. But we’ve had this conversation…
Yeah, I remember a column Cindi wrote one time that said people in expensive homes should pay higher property taxes because it costs more for fire departments to to put out fires for big houses. And that people in nice neighborhoods should pay more for police protection to keep the criminals in poor areas.
There is no rational justification for the concept of “progressive” property taxes. They are intended to provide services to the community as a whole, equally. And the cost of those services: schools, fire, police, libraries, etc. that are available to all should be shared. With income taxes and sales taxes, you are taxed on exactly what you make or spend. With property taxes, the value is hypothetical, not based on actual cost or actual value. Did we see taxes drop in 2008-2010 when market values tanked? I don’t think so.
The ideal solution would be a common monthly fee, directly debited from bank accounts whenever possible. if you want a surcharge that kicks in based on square footage above 2500, fine. That would REALLY wake people up to the true cost and value.
I doubt that Cindi said “because it costs more for fire departments to to put out fires for big houses.” What she might have said was that putting out a fire at a $500,000 home is worth more to the owner than putting one out at a $100,000 home.
A person with a nicer home, and a higher income, is benefitting more from living in the community. And the community’s amenities would not exist without government, whatever libertarians may believe — starting, of course with laws that establish and defend the very concept of private property…
They pay for that benefit already with higher home costs and HOA fees. The benefit is in the home and neighborhood, not the government services provided.
A million dollar home gets the same benefits a $50K double wide gets. Nothing more.
Please tell me why two houses — side by side in a neighborhood – should (and do) pay different property taxes. What if the smaller one has all sorts of upgrades inside the house while the larger home is trashed? It’s a dumb system…
I just can’t even begin to follow your reasoning. Exactly what does a higher home cost and an HOA fee do to pay for government services?
A fire department saving a million-dollar house is a service worth a million dollars. The same fire department saving that double-wide is work $50k. That’s an oversimplification, of course, but you get the idea. I hope…
It;s also far less likely that a million dollar house will burn down compared to a prefab home or a stick built 1200 square foot ranch.
The reasoning defies logic.
It’s more than oversimplification… it’s completely wrong. The fire department isn’t saving anyone a million dollars. That’s what home insurance does. Sheesh… seriously, this is really amazing that you don’t get it.
Now use your “logic” to explain what benefits the million dollar home owner gets from the school system, library, or parks department? In most cases, it’s those million dollar home owners aren’t using those services because they can afford to send their kids to private schools, camps, and buy books. So, again, the million dollar homes are subsidizing everyone else.
A person pays a million dollars for a home and high HOA fees specifically for the purpose of owning a nicer home in a nice neighborhood. The property taxes don’t create the neighborhood or the home. The property taxes pay for EVERYONE in the county to have all the same services — just at a different price based on a guess by the government of what it thinks the house is worth. It’s not a value that you can guarantee you can sell the house for… especially in times when the market is bad. It’s just a number.
How is this so difficult to understand? The taxes are just government’s way of saying “You should be glad you can afford a nice house, so pay more!”
“How is this so difficult to understand?” That’s exactly what I keep thinking.
Look at the market value of a home in an excellent school district, or in the particular zone of a school with a great reputation. Then put that identical house in a low-performing district. Tell me what it can now sell for.
I knew you’d mention insurance. OK, let’s talk about that. Let’s compare the cost of insurance on a house that’s a block from the firehouse to that on a house that’s 10 miles from a firehouse.
The ways in which government services provide value to a home are SO obvious that I really, truly don’t understand why it’s not plain to my libertarian friends, who seem to think that value occurs in a vacuum.
I’m not even getting into the more complicated ways that living in a community with public amenities provide value to a home; I’m trying to stick with the more obvious stuff…
it’s the million dollar homes that create the environment for the good school district, not the other way around. There wasn’t some magical fairy who created a school district from thin air. Look at Richland School District 2 if you want a perfect example. Higher income homes in Spring Valley and Wildwood created an above average school district. Now, over the past 20 years, as unfettered growth of lower priced homes have swamped the area, the same schools have regressed to average or worse. The homes that don’t contribute enough money to maintain the same levels depend on the expensive homes to subsidize their kids schooling.
I really want to understand how the fire department saves a million dollar home in some way that is different than a $50K one. If both burn to the ground, what exactly did the extra property tax get the owner? Nothing. It’s the high insurance they paid on the home that provides the benefit. The fire department does the same job either way.
As for your insurance question, I would expect the cost difference between your two example houses would be only minimally different. But that’s not the case anyway… I live further away from a fire department than many mobile homes. Who do you think is paying more for Richland County fire services? And it’s not because they have to drive an extra mile.
And on insurance, don’t listen to me, listen to the insurance people…
Distance from hydrants is also an issue…
This whole fire scenario got me wondering – has anyone ever heard of a home fire that DIDN’T result in a home being completely or mostly destroyed? Even in the best case scenario, I’d bet most fires have a 15 minute head start before the fire department can get there and deploy their equipment.
Yeah, I understand there was a fire in the kitchen of our house under previous owners. But it was quickly contained. There was damage to the walls, so they redid the room and an adjoining hall with hardwood floors and put up new wallpaper (this wallpaper). We later went ahead and did the whole first floor with hardwood.
But I take your point. If it’s a good-sized fire, how many houses escape being “totaled?” If not consumed by fire, then too severely damaged by smoke or water to be saved? I don’t know…
I tried looking it up, without success. Although I did see total damage in dollars from house fires nationally more than double from 2016 to 2017.
I blame Trump. 🙂
No one knows what the solution is. The giveaway to homeowners was so huge that no one expects the Legislature ever to try to repeal it.
Business interests continue to push for reform, but given a choice between sucking up to residential taxpayers and listening to business, SC Republicans will choose sucking up every time.
You’ll hear individual lawmakers, even Republicans, talking about the problems of 388, but there’s not a lot of optimism that they’ll do anything…
I’ve enjoyed visiting Greenville for years, but after spending a weekend in Travelers Rest and going to the Fall for Greenville festival last October (amazing), I’ve pretty much fallen in love with the place. We could learn from them.
I’m off-and-on reading Reimagining Greenville by John Boyanoski and Knox White. In the first few chapters what I’ve noticed that Greenville has that Columbia lacks is…
1. The tax base that allows them to plan big.
2. A willingness to not only engage expert outside consultants, but to act on their recommendations.
3. Commitment to seeing things through and to maintain what they have committed to. (I’m looking at you, Finlay Park.)
It’s looking more and more like a retirement town to me…
My wife and I have best friends who moved from Northeast Columbia to Travelers Rest two years ago. They wish they had done it sooner. I may be influenced by regional proximity bias but it sure seems like their local government up there isn’t nearly as dysfunctional as what we have in Richland County.
My only caution would be that a lot of people are making the same decision to move in that direction so you might expect to see the typical growth issues that occur when that happens especially with traffic and rising home prices.
I’m looking a little further north in a 5-7 year timeframe.
I went to a place called Hot Topic in the mall.That was the last time I went to the mall…https://milkcowrecords.bandcamp.com/track/i-foresee-trouble