Beaufort News

Transportation sales tax hits end of the road today

Beaufort County's 1-percent transportation tax expired today, returning the local sales tax to 6 percent and eliminating the 1 percent levy on most groceries.

Voters approved the tax in 2006. It took effect the next year with the goal of raising $152 million for road construction. It was scheduled to expire in March 2013 or whenever the $152 million revenue cap was met.

That threshold was probably reached this financial quarter, said county chief financial officer David Starkey. He said there is no way to know for certain when the cap was actually met.

Although county residents and visitors will pay less on most purchases, economists say the impact of a lower sales tax likely will be minor.

William Hauk, assistant professor of economics at the University of South Carolina in Columbia, notes that tourists' spending patterns are unlikely change as a result of the lower rate.

"That said ... it might make things a little easier for people if the cost of food and groceries are lower," he said.

Hauk believes lower-income residents are more likely to spend savings from the reduced tax, while wealthier people would probably save some or all of the difference.

Scott Baier, assistant professor of economics at Clemson University, said consumers should see a little extra money in their pockets, but he says it's not clear whether they will spend it locally, if at all.


Since 2006, the county has used the sales-tax revenue to build a section of the Bluffton Parkway, improve Boundary Street in Beaufort and widen U.S. 278. It also helped fund the U.S 17 widening to the Colleton County line and repaved portions of William Hilton Parkway on Hilton Head Island.

The $50 million widening of Lady's Island Drive, which included construction of a second McTeer Bridge span, was paid for with the tax revenue.

It also will also help pay for the $31 million flyover bridge to connect U.S. 278 with Bluffton Parkway near Hilton Head, as well as widening parts of S.C. 170 between U.S. 278 and S.C. 46.

"From my perspective ... the most recent sales tax has been enormously successful and has allowed us to position Beaufort County to leverage money, such as (state and federal) money far more effectively than we could have without it," said Rob McFee, the county's director of engineering and infrastructure.

Although there are no immediate plans for a new transportation sales-tax referendum, some County Council members believe it's only a matter of time before another is proposed.

Related content:

Officials laud road projects as county transportation sales tax set to expire Sept. 30, Aug. 18. 2012