This Port Royal property sold for $93 million. Here’s how the sale will affect your taxes
Port Royal is planning millions in infrastructure improvements without a tax increase — thanks to significant tax base growth including the sale of one apartment complex for $93 million.
The Town Council is scheduled to vote on final approval of an $8.6 million budget for 2023 on Wednesday that includes the capital improvements. The current fiscal year budget is $7.6 million. The difference of $1 million is additional property taxes and fees the town will collect because of growth, not a tax increase.
Here are five things you need to know about the proposed budget:
New sidewalks, streets
Some $10 million in capital projects are planned over the next couple of years including road resurfacing, new sidewalks, storm-water drain upgrades and aesthetic improvements.
Expanding the town’s sidewalk network and road resurfacing, Town Manager Van Willis said, will be the most notable improvements.
“Our goal is to resurface everything we own downtown that needs resurfacing,” Willis said “It’s been needed for years. This is our first chance to actually do it.”
The town is planning to borrow $3 million this year to help pay for the work. It also is planning to use federal Community Development Block Grants and $5.4 million in America Recovery Plan funds to finance the projects, which are expected to begin in a few months but will take a few years to complete, Willis said.
No new taxes
Initially, the town had considered approving an additional 6 mills to cover the $3 million bond issue.
A mill is the rate of tax used to calculate local property taxes. One mill is equal to one-thousandth of a dollar per $1 of assessed property value. If a city council, for instance, approves a tax of 90 mills, then the taxpayer will pay $90 per $1,000 of assessed property value. The value of a mill varies across the cities and towns in South Carolina.
However, due to new construction, and the sales of significant properties, the town saw a 16% increase in the value of its mill compared to this year, Willis said.
Property tax revenue will increase from $3.2 million to $4.2 million in the 2023 budget.
Business license, permit and franchise fees have also increased due to the development uptick.
As a result of the increase in property tax and fee revenue, borrowing-related debt can be covered by the current tax rate, which is 74 mills.
“Whatever your tax bill was last year,” Willis said of the town’s portion of the tax bill, “it will remain the same tax bill.”
Fees won’t be increased either under the proposed budget.
Big sale helped revenue
One of the significant transactions that contributed to Port Royal’s increase in taxable value was the sale of the Preserve of Port Royal apartments in December 2021 for $93 million, Willis said. Two years ago, the apartment complex had sold for $54 million.
“That’s pretty big,” Willis said of the sale and the nearly $40 million increase in value, which in turn is increasing property tax revenue not only for the town but also Beaufort County and area public schools.
Borrowing capacity grows
The town is able to tackle the long-needed infrastructure work at this time because its borrowing capacity has increased to just more than $4 million because of the expansion in the tax base, Willis said. Borrowing capacity had been about $1 million.
Pay increase planned
Employees are getting a 5.9% cost-of-living pay increase.
Public input sought
Council members will vote on the budget when they meet at 6:30 p.m. Wednesday, June 8 at Town Hall, 700 Paris Ave. Public comments will be taken at that time. The budget is available online at portroyal.org.
This story was originally published June 7, 2022 at 12:54 PM.
