Residents call Beaufort out over $32 vehicle ‘tax.’ Here’s how the city reacted
A controversial “vehicle tag fee” has been struck from Beaufort’s proposed $73.4 million 2027 budget after the City Council responded to strong criticism from residents.
The City Council voted 4-1 to approve the budget — with an amendment killing the annual $32 vehicle tag fee — on a first reading Tuesday. One more vote is needed to finalize the budget, which is now short $325,000 after the fee’s removal.
Even some City Council members said they didn’t like the idea when City Manager Scott Marshall released the budget last month. But it still made it to the first reading of the budget Tuesday, when Councilman Josh Scallate proposed axing it after residents questioned its need, fairness and even the name.
If money goes from the pocket of residents to the government “it is a tax,” said Jonathan Brown, a Mossy Oaks neighborhood resident and one of several locals to take issue with the $32 annual payment.
The fee would have been added to the existing vehicle property tax bill residents pay each year. It would have raised $325,000 for street sweeping roads owned by the South Carolina Department of Transportation, and for mowing grass in the right-of-ways.
Now the City Council must find $325,000 elsewhere in the budget to make up the difference before the final budget is approved next month.
In the proposed budget, the city will collect $1.6 million in additional property tax revenue from rising property values and new construction. Property value growth is bringing in more revenue, the city said, which means no increase in the tax rate.
Brown, the Mossy Oaks resident, said there are already too many fees and property taxes. He ticked off nine he pays that are billed by various levels of local government totaling $5,000 a year. That doesn’t even include state and federal taxes, he noted.
Brown called the plethora of fees and taxes “death by a thousand cuts.” Beaufort residents, he added, would be unfairly taxed by the new tag fee because the roads where the money would be applied are used by drivers from across the region.
What the city manager says
City Manager Scott Marshall said generating the same revenue would require raising two mills to the tax rate. The fee, Marshall said, would have provided a closer connection between the service user and the service while spreading the burden to more people, including renters.
Marshall said SCDOT does maintenance in its right-of-ways, but it does them on its own schedule and not to the standards that Beaufort prefers. That’s why the city does additional work on SCDOT right-of-ways, he said.
Beaufort County already charges a $20 tag fee per vehicle for road maintenance. The county began implementing a $2 per vehicle road fee in the 1970s.
Councilman Scallate’s amendment to remove the fee from the ordinance received no opposition from other council members except Neil Lipsitz, who said he didn’t feel comfortable cutting the fee without knowing where the funding to replace it would come from.
‘Just chop it’
Council members kicked around cuts the city could make in other areas to offset the revenue the fee would have raised.
“It’s not hard to do. Just chop it, just do it,” said resident Paul Trask. “You would really set a wonderful precedent for this city if you begin to think that way instead of creating additional fees like the tag fee which is not going to be popular.”
Waterfront park challenges
The budget needs two votes to be approved and Tuesday’s was the first. The final budget will be voted on June 9.
Scallate also successfully proposed a second amendment to the budget to reallocate $1.2 million in tax increment financing funds to repairs for the Waterfront Park promenade. It’s the city’s most pressing problem, with one estimate placing the cost of replacing it at $30 million.
Those funds were intended for other purposes like buying land for parking at City Hall and new cameras, IT switch upgrades and lighting, also at City Hall.
Scallate argued fixing the promenade must be the top priority right now, even if the city does not currently know where all the money to fix it will come from.
“I think we owe it to our constituents, we owe it to the community to be the best prepared as possible with the funding we do have now,” Scallate said.
The additional $1.2 million will be added to $1 million that the city had already set aside for promenade repairs using bond proceeds left over from previous work at Washington Street and Southside parks.
Other projects
Also proposed in the 2027 budget:
- $25.4 million for capital projects, continuing the city’s recent heavy spending on infrastructure.
- a $1,000 annual short-term rental license fee, which will generate an estimated $242,000.
- a 2% cost-of-living adjustment and up to a 2% merit increase for city employees.
- a 3% increase in employee health insurance costs.
- $150,000 for a housing repair assistance program.
- $250,000 for a new park honoring the South Carolina 1st Volunteers, who were Black soldiers who served in the Civil War.
- Hiring three police officers.
This story was originally published May 13, 2026 at 8:43 AM.
