Richland County Council defends penny against state DOR assault

The South Carolina Department of Revenue has overstepped its legal authority in withholding the proceeds of a voter-approved penny sales tax from Richland County, and in the process has put in jeopardy the County’s ability to fund critical infrastructure improvements as well as the public transportation upon which thousands of County residents depend on daily.

DOR has not provided a clear response to repeated requests by Richland County Council for proof of the legal authority that the state tax collector has to withhold the funds it is collecting. The state agency also has, without adequate explanation, singled out Richland County in a manner unlike any of the other counties in South Carolina that collect such a tax.

“Therefore, we must conclude that, despite the absence of legal authority, you are attempting to overturn the Richland County Transportation Penny Program as approved by the voters of the County,” County Council Chairman Torrey Rush said in a letter to DOR Director Rick Reames III. The letter is a unified response by the County Council in defense of its residents and taxpayers.

The County has issued more than $50 million in debt as part of the $450 million in planned projects to be funded by the sales tax penny approved by voters in 2012. The County’s credit rating, the projects that have already contracted or are planned, and the jobs they have and will create are now at risk because of the department’s unprecedented action.

Along with withholding the County’s funds, the DOR is attempting to force the County to pay for administrative expenses related to the projects outside of the sales tax revenues, a demand that would force either a tax hike or cuts to other vital County services — including the COMET bus system — despite the administrative costs being specifically authorized by the referendum the voters approved.

“The DOR has no obvious authority to tell the County how to spend the people’s money, especially not in a way that is inconsistent with the referendum approved by the citizens. That would be violating the voters’ trust in us, and we’re certainly not going to increase our citizens’ tax burden because of the department’s capricious actions,” Chairman Rush said.

“Because we’re not capitulating to their demands they are putting years of planning and real progress at grave risk,” the Council Chairman added.

Richland County Council will continue to argue its case that the funds should be released.

Updates about penny sales tax program are available at www.richlandpenny.com

Separately, “We also intend to vigorously defend the will of the people of Richland County who approved this sales tax against lawsuits filed by private citizens who are attempting to impose their agenda on this public body,” Chairman Rush said in reference to actions filed by a Greenville businessman in the name of the South Carolina Public Interest Foundation and by a Columbia real estate broker.

“This same out-of-town group has sued the State and local governments across South Carolina over similar issues,” Chairman Rush said.

“They basically dislike local governments and want to substitute their own judgment for those decisions made by people who were elected by the citizens of this County to make these critical decisions,” Chairman Rush added. “We fully expect to prevail.”