Beaufort residents may face $50 hike in vehicle fees

Beaufort residents could pay $50 more for vehicle registration if the city moves ahead with a possible source of new revenue in the next year.

The fee would apply to all vehicles registered in the city and raise an estimated $377, 360 in the next fiscal year for police and fire services, city finance director Kathy Todd said in a presentation to City Council this week.

A public hearing and two votes by council would be required to pass the fee before the next budget is passed this summer. The fee might be needed for two or three years, city manager Bill Prokop said. The new budget must be finalized by June 30.

Some details are yet to be worked out, such as how commercial vehicles would be treated, he said.

Prokop said the new revenue is needed because of unexpected cost increases including an eight percent rise in health insurance costs. He said more than $1 million has been cut from what department heads said they need for the next fiscal year.

“We have Walmart and a couple of other things coming,” Prokop told council members. “We have to plan police and fire protection now.”

This isn’t the first time the city has considered the new fee approach.

Beaufort considered a fee in 2015 based on a percentage of appraised property values. The fee would have applied to all property owners, including nonprofits groups.

The proposal, and a similar one in 2013, got pushback from tax-exempt nonprofits. Council members wondered if the idea was too burdensome for large nonprofit organizations like the Technical College of the Lowcountry that would face thousands of dollars in fees. Lower income residents would have faced another fee on top of property taxes.

The idea was later dropped.

In proposing the vehicle fee, city staff pointed to state law that restricts how local governments raise money, an underfunded state Local Government Fund and a proposed legislative bill that would cap business license fees.

In the face of a tight budget last year, the city unveiled seven initiatives to boost coffers and pay for smaller projects with no means of funding them in the years to come.

The city now wants to change its ordinance to make nonprofit and charitable groups subject to a business license tax on money made from its for-profit ventures, such as daycares, apartment rentals and medical offices. If a nonprofit group offers a service only for members — a church operating a daycare for members only, for instance — the tax would not apply.

In revenue projections presented this week, the city estimates it would receive an additional $100,000 from business license fees. The city’s business license fee structure and rates will be analyzed this fall by the Municipal Association of South Carolina.

The city expects to receive $200,000 more this year in hospitality taxes over last year and predicts a $110,000 jump in accommodation taxes. Most of the revenue from those taxes must be used for tourism related expenses, per state law.

This story was originally published April 21, 2016 at 9:15 AM with the headline "Beaufort residents may face $50 hike in vehicle fees."