Fairfield County Council eyes penny sales tax

WINNSBORO – Laying the groundwork earlier this month for a one penny sales tax to be placed on the November 2020 ballot, council members voted 5-2 to create a commission that would suggest projects to be funded by the penny tax and to appoint members to that commission.

“This resolution is to create a capital sales tax commission for the purpose of moving forward with a referendum vote by the public as to whether they would support a penny sales tax which is anticipated for the construction of a wastewater treatment facility and infrastructure to support future growth in the county,” County Administrator Jason Taylor told council members.

The county’s Joint Water and Sewer Authority attorney, C.D. Rhodes, explained that the tools at a county’s disposal to fund capital needs are limited. 

“Many counties across the state have found the penny sales tax, which is authorized under the Capital Project Sales Tax Act, to be the only way to fund large capital improvements,” Rhodes said. “The numbers for these types of projects are exceptionally large and far exceed the debt limits of nearly every county in the state.  When looking at options, a capital project sales tax is generally the only viable option at a county’s disposal,” he said

The penny sales and use tax would be for all sales in the county except unprepared foods (groceries) and medicines. 

Council Member Moses Bell referenced sources that he said stated that the proposed one penny sales tax is a regressive tax and unduly harms the poor, the low income and those persons without insurance. 

Rhodes said the structure of the tax is outside of the county’s control. 

“The Department of Revenue and state statute dictate what the tax is imposed upon. The county cannot dictate this,” Rhodes said.

Of the commission’s six members, the county appointed three: Rick Gibson, Randy Bright and Harriett Brown. The Town of Winnsboro will appoint two members and those two members will select one additional member from one of the other municipalities in the county.

“These six commissioners will, per state statue, come up with a list of the capital projects to be funded through the tax,” Rhodes said. “The list right now includes funding a portion of the cost of the wastewater treatment plant.  There will need to be a second project to round out the use of the funds in case the amount exceeds what is anticipated, which could be sewer lines throughout the county to connect industry and commercial establishments and other needs in that portion of the county,” Rhodes said.

Rhodes said if many other projects show up on the list, they could possibly be funded by other means.

“We are talking about funding a significant portion of the cost of the wastewater treatment plant, a project that cannot be funded through any other means.  In many respects, this is the only option to come up with up to $12M to devote toward the cost of this project,” Rhodes said.  “An important step in the process is clear information conveyed from council that there is an expectation the tax will ultimately fund the wastewater treatment plant.”

Once the commission comes up with a list of projects, they will formulate a question to be placed on the ballot, and the commission will adopt a resolution to this effect, Rhodes said. The resolution will be brought before council, who will then make the decision by ordinance to either accept the projects presented in total or to reject in total. 

“If the projects are adopted, they go forward to a referendum, and the voters will vote to decide whether or not they want to impose that one penny sales tax in order to fund those specific projects,” Rhodes said.

The only change that can be made to the ballot, he explained, is to authorize the issuance of general obligation bonds to finance the listed projects.  He said those bonds would then be paid back from the revenue of the one cent sales tax. 

“Because the bonds would be referendum approved, they would not count against the county’s debt limit,” Rhodes said. 

Once the commission is fully appointed, it is expected to have a list of projects back to council by late spring, 2020. The deadline for third reading of the ordinance that approves all of this is Aug. 15.