If sales tax referendum fails, will critical projects still get funded?

Beaufort County officials hope taxpayers OK a penny-sales tax referendum in November.

But they have a plan in case they don’t.

Regardless of whether the capital improvement sales tax referendum passes, there are projects that are critical to public safety and deserve funding, those leaders say.

They are considering issuing bonds to pay for some of those projects in case local voters reject adding a penny sales tax to every dollar spent in the county.

“Some of the (projects) that are on the referendum are really important,” Beaufort County Councilman Brian Flewelling said. “We would be irresponsible not to (consider alternative funding sources). These are health and safety issues, and these have to be financed one way or the other.”

Deputy county administrator Josh Gruber said Windmill Harbour roadway improvements, Beaufort County Sheriff’s Office equipment upgrades, and a new emergency management facility in Bluffton are examples of projects that could be worthy of funding with bond money.

The sales tax hike is expected to yield $120 million in revenue over four years, while the bonds could bring in around $45 million.

“If the referendum is successful, that is going to be the most favorable financing mechanism for the citizen’s of Beaufort County,” Gruber said.

That’s because a portion of sales tax revenue is generated by visitors to the county, while debt associated with new bonds would be shouldered solely by local taxpayers, he said.

“So, when you weigh the two options, it’s certainly preferential to have the (sales tax referendum) pass,” Gruber said. “But we need to plan for an alternative just in case it doesn’t pass.”

Some county leaders are concerned that simply floating the idea of a bond issuance could jeopardize the success of the referendum.

“You chill (support for) the sales tax referendum when you start talking about the county paying (for projects with bond money) anyway,” Councilman Stu Rodman said earlier this week.

“The opponents (of the referendum) are going to jump on it” as a reason to vote against the tax hike, he said.

Councilman Jerry Stewart — calling himself “an optimist” — said he believes county voters will ultimately come to the conclusion that the sales tax increase is the preferential way to fund projects.

Gruber said his staff will put together a list of projects deemed most important and potentially eligible for bond funding, should the sales tax hike fall through.

That list will likely be presented to county leaders prior the full County Council’s consideration of the bond issuance later this month.

This story was originally published September 7, 2016 at 2:16 PM with the headline "If sales tax referendum fails, will critical projects still get funded?."