Sea Pines pushes new tax for traffic projects, but most residents won’t have a say
This article has been updated to reflect that Stu Rodman is no longer the chair of the Sea Pines finance committee. After the publication of this article, Sea Pines Community Services Associates published finance committee documents online that reflect the new officers and most recent minutes.
Last year, Sea Pines failed in an attempt to raise its residents’ annual assessments.
But Hilton Head Island’s most well-known gated community is trying again to implement a fee for residents. The Community Services Associates Board voted Tuesday to create a petition for a special tax district in the community.
The tax collected by a successful district would pay for stormwater, landscape and traffic projects. But the latest move appears to sidestep a failed referendum in Sea Pines last year, in which not enough voters agreed to raise their annual assessments to get the projects done.
Sea Pines’ Community Services Associates Board voted to authorize creating a petition to circulate in the community. It needs 15% of electors to sign it before the board can hold an election on the special tax district. Sea Pines leaders said the extra money would raise between $3 million and $4 million.
The special tax district is another attempt by Sea Pines leadership to find money for projects they say will combat the community’s aging infrastructure.
Opponents say the special tax district circumvents the iron-clad rules on raising assessments. Sea Pines covenants require a 75% threshold for changes to pass, but an election would require only 50% of voters in favor to establish a special tax district in Beaufort County.
Although the same people would be paying the tax as would have paid the assessment, a vastly different pool of people would decide on the tax increase. State code allows only Beaufort County voters to vote on the tax, which would leave nearly 60% of Sea Pines property owners — those who live in other counties or states — without a say.
Sea Pines has launched a website advocating for the passage of a special tax district. The site says the goal is to establish the special tax district in 2021 and to begin collecting tax revenues by January 2022.
That site doesn’t tell property owners how much a tax levied by a special tax district would be, though. The site says the annual tax “may be greater or less than the proposed increase in the 2019 vote.” The amount will depend on a property’s tax value and the millage rate selected by the Sea Pines Special Tax District’s Board.
What is a special tax district?
A special tax district is formed to collect taxes from a specific area for certain services.
South Carolina state code gives Beaufort County the power to tax different areas at different rates.
To establish a special tax district, 15% of voters within the proposed district must petition the county government for a vote. Once on the ballot, a special tax district has to amass only a simple majority of votes to pass.
In other states, tax districts collect money to maintain airports, public utilities and cemeteries.
Beaufort County has been home to six special tax districts, all of which are north of the Broad River and have been used to pay for road maintenance, paving and, in one instance, a community pool.
County control
If voters established a tax district, the County Council would operate it, not Sea Pines. According to state code, the council would add the tax to property owners’ tax bills. That’s different from the failed referendum, where the increased property assessments would have been collected and overseen by the POA.
The council could either oversee the district itself or appoint a board of three to five people, state code says.
The common factor in the tax district proposal and the body that would oversee it: County Council member Rodman.
Rodman, who was County Council chairman until March, wears two hats on this issue. He is the immediate past chair of the finance committee in Sea Pines. In those two leadership roles, Rodman has overseen the budgets for Sea Pines and for the entire county.
Although Rodman is no longer the chair of the Sea Pines finance committee, he helped initiate the creation of the special tax district.
Just one month after the referendum failed in July 2019, Rodman’s committee brought the idea of a special tax district to the full Sea Pines board of directors. Rodman said his committee was “clearly” considering the special tax district in response to the referendum failing.
At the time, Tom Lennox, Ward 5 representative on Hilton Head Town Council, said the failure to fund projects was making Sea Pines an outdated place to live.
“I think the 75% super majority required by the covenants is almost impossible to overcome, regardless of the issue. That’s really hurting the effort to try to get some things done in Sea Pines,” he said in December. “With all this deferred maintenance, we’re going to age.”
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Who gets to vote?
The people who can vote to establish a tax district are different from those who voted on the failed referendum.
In a referendum to change Sea Pines covenants, each individual property gets one vote. That includes non-resident property owners.
In June 2019, Sea Pines voters narrowly defeated the ballot measure that would have raised their annual assessments by $450 in the coming years. The referendum failed by just 122 votes — 72% voted for it.
In a vote for a tax district, any person living in Sea Pines who is registered to vote in Beaufort County could cast a ballot.
However, the district would exclude non-resident property owners or second-home owners — who make up about 60% of property owners in Sea Pines, according to Richard Matthews, a former member of the Association of Sea Pines Plantation Property Owners board.
For the people who own homes in Sea Pines but don’t live there full time, Matthews said in 2019, “it’s clearly taxation without representation.”
This story was originally published October 1, 2020 at 4:35 AM.
