From a penny sales tax to fees for parks, transportation and fire/emergency services, the city of Beaufort is considering ways to increase revenue and spread out the financial burden of government.
City finance director Kathy Todd presented "some additional revenue options" to City Council during its work session Tuesday night.
Council has already heard presentations and discussed business licenses, property taxes and other potential revenue streams.
The city expects revenue to decline, along with its property-tax base, because of the upcoming county-wide reassessment. City staff is working with projected numbers and expects better estimates after April 1.
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Those early estimates indicate the city's tax base will decrease from $62.4 million to $58 million, leading to a revenue decrease of between $350,000 and $500,000.
Most of the presentation Tuesday centered around the penny -- or local option -- sales tax. A penny tax for transportation and road improvements has been used twice in Beaufort County, but the local option sales version has not been used before.
As of February, 31 of the 45 counties in South Carolina have implemented a penny sales tax, Todd said. It would have to be approved by the county and voted on by residents in a referendum, she said.
If the county approved such a tax, it would be collected by the state and returned to the county in two checks each month, Todd said. The larger check -- 71 percent of the total collected -- would go into a property tax credit fund that would be redistributed to property owners to decrease their tax bills.
The remaining 29 percent would go to the county and municipalities to be used as needed, Todd said.
The penny sales tax is not viewed as negatively as some other taxes because it spreads the burden out over a larger group of people and time, Todd said. In Beaufort, about 65 percent of purchases are made by people who live outside the city limits, meaning those using city services but not paying property taxes would be contributing.
However, if the tax credit is not watched carefully or is miscalculated, the city could have to absorb a shortfall because the property tax credit is mandated by state law.
Other revenue possibilities include a $25 to $35 fee for vehicles registered in the city, a plan considered last summer.
A park fee, which city manager Scott Dadson said would be most effective county-wide, could offset the $1.9 million cost of maintaining city parks.
Possible fire and EMS fees could include costs for inspections, a fire fee for properties that do not pay taxes, such as schools, hospitals and non-profit organizations, or recouping emergency response costs from non-residents who cause vehicle crashes. That is a growing practice nationwide, Todd said.
Tuesday's was the third recent discussion of revenues for the next fiscal year. Several presentations about expenses are expected to begin during next Tuesday's 5 p.m. work session.
- City of Beaufort residents could face tax increase next year, March 12, 2013
- Property tax bills could rise despite declining property values, Jan. 12, 2013
- Beaufort hits snag in plans to improve parking at sports complex, March 17, 2013
- School traffic causes headaches for Beaufort neighborhood, Sept. 30, 2012