There is much truth in the saying that “New Yorkers never met a tax they didn’t like, and South Carolinians never met a tax they did like.”
That principle will be put to the test at the ballot box in November when Dorchester County voters decide whether to add 1% to the already-existing 7% sales tax rate in the county for the next 15 years.
The referendum was put forward by both Dorchester County school districts to help pay for new construction and significant deferred maintenance and repair.
If the referendum passes, the 1% tax is projected to bring in nearly $700 million over 15 years. Ninety percent of that money would go to the two districts, with DD2 getting 85% of it, and DD4 getting 15%. As a carrot being tossed to property owners, the remaining 10% of the new tax revenue would be dedicated to reducing property taxes.
Unless voters think the two school districts are exaggerating their needs, this vote should be a no-brainer. The explosive growth of residential housing in Dorchester County and the problems associated with it are on everyone’s lips. With those new houses come more families with children, and those children must be educated.
But nothing is simple or predictable about American politics these days. Indeed, many arguments are already being made to defeat the referendum. For example:
- A sales tax is inherently regressive, so the impact will be felt hardest by those who can least afford to pay it. (The only products exempt from the tax increase are unprepared foods.)
- Small businesses already struggle to turn a profit. This additional sales tax won’t help them.
- Renters will have to pay the sales tax, but they won’t get the corresponding property tax break. That will go to the landlords.
- The county-wide anger at developers could lead to a “No” vote. Because they helped foster the explosive growth in Dorchester County, perhaps they should be the first group to help the schools meet the additional repair and construction costs.
- There is no mechanism to halt the tax in fewer than 15 years if it grosses more money than anticipated for the schools. The money will keep rolling in. Some voters might prefer a revenue cap that would end the tax early.
- Because no rationale for the 85/15 split between the two districts was offered, voters may assume either that it is not generous enough to DD2 (by far the larger district in student headcount by a margin of 92% to 8%), or they may assume that DD4 deserved more than 15%, because that is where growth is likely headed in the next two decades.
- Finally, there is no Citizens Accountability Review Team (CART) to watch over how the sales tax money is being spent by the districts. Such a CART does oversee spending of the $200 million raised by the schools in a 2024 bond offering.
So, in the face of these arguments, why vote to approve the sales tax increase?
- Those who don’t live in Dorchester County but who spend money here will pay the tax, too. They will share the burden of funding the school repair and construction costs. How much they would pay is open for debate. In advancing the proposal, the school boards suggested as much as 60% of the sales tax would be paid by outsiders. Perhaps.
- Property owners in Dorchester County will get a small reduction in their property taxes, although how much depends on what they already pay. For them this rebate would offset some of the increased sales tax.
- A reliable flow of new sales tax revenue would permit the school districts to borrow against it. This will give the districts more control over the pace of construction and the projects to prioritize.
- If the referendum fails, the need for construction funds will not go away. Either the districts will put a similar referendum back on the ballot in a year or two, or they will have to increase their borrowing, if possible. Every year construction is delayed, the cost will increase.
So where does all this leave the intelligent voter?
If you believe the needs of DD2 and DD4 are real, and if you believe that the quality of K-12 education depends in part on adequate facilities, there is little choice. Vote “Yes”.
However, if you want to register a protest against developers, higher taxes, the lack of oversight, or any number of other grievances, real and imagined, vote “No”.
Just remember that if the referendum fails, the problem remains, and it will be more expensive to fix next year. You can bet on that.
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EDITOR’S NOTE: For DD2’s take on this initiative, including a list of projects to be funded, go to: https://www.ddtwo.org/nov3#ballot.