Facing a more austere fiscal 2014, Beaufort City Council directed staff Tuesday night to work on a penny sales tax as officials continue to look for ways to raise more revenue.
Finance director Kathy Todd led the discussion during the work session as part of a two-month series of talks about the budget.
Members asked city manager Scott Dadson to draft a letter to other municipalities about the penny -- or local option -- sales tax, which would need to be approved by Beauofrt County and voted on by residents in a referendum
A penny tax for transportation and road improvements has been used twice in the county, but the local option sales version has not been used before.
"LOST has the most bang because built into it is tax relief," Dadson said.
If approved, a percentage of the money collected would be redistributed to property owners to decrease their tax bills. The remainder would go to the county and municipalities to be used as needed.
Councilman George O'Kelley Jr. called it the least intrusive type of fee or tax the city could impose.
Other options include county-wide parks fee, a fee for emergency services, a vehicle fee, or "rolling forward" tax rates, which is a practice that keeps tax revenue the same by adjusting the tax rate.
Council also discussed seeking payments in lieu of taxes from non-profits groups and other non-tax-paying entities in the city such as schools and churches. The Beaufort Housing Authority is the only entity that makes such a payment, Todd said.
"It's worth putting out there," Councilman Mike Sutton said. "I'd stand there and argue with them myself."
"I'd stand there behind you," O'Kelley added.
Early estimates from the county-wide reassessment indicate the city could lose about $500,000 in property tax revenue, but those numbers are not firm nor exact, Todd said. Until August, when property tax bills go out, the city won't know what kind of decrease it will face, she said.
"I have gotten some estimates and I don't even want to muddy the waters by even bringing them up because it is a moving target," she said. "We're just going to have to pick a direction and go with it and adjust in August."
Follow reporter Erin Moody at twitter.com/IPBG_Erin.