PENNY SALES TAX

Benefits to Columbia economy of sales tax increase pushed by business-backed report

dhinshaw@thestate.comOctober 10, 2012 

COMBINED PHOTO IMAGES — Rachael Lowe/rlowe@thestate.com Buy Photo

Passage of a penny sales tax for transportation in Richland County would create more than 16,500 jobs in construction and new industry, said a local economist who released his analysis Wednesday.

Harry Miley, working for the pro-penny Citizens for a Greater Midlands, figured on 5,508 permanent jobs attracted to new industrial sites along the riverfront and in southeast Columbia if voters approve the tax. Those sites would be created by opening new roads into an estimated 9,000 acres of undeveloped land, according to his report.

In addition, he would expect 4,170 temporary jobs in construction. The additional jobs Miley counted would come from suppliers to contractors as well as new hires in other sectors of the local economy as construction workers spend their paychecks, he said.

But an economist formerly with the S.C. Commerce Department questioned Miley’s results, saying economic impact studies are always rosy.

On Nov. 6, voters countywide will decide on a proposed penny increase that would be in place for 22 years and take the county’s sales tax to 8 cents on the dollar. Proceeds of $1.07 billion would be divided among roads, public transit, sidewalks, bike lanes and nature trails.

Miley released his seven-page report at a morning news conference at the Clarion hotel attended by officials with the Greater Columbia Chamber of Commerce as well as representatives of local engineering and construction firms.

Later, economist Rebecca Gunnlaugsson poked holes in his findings, noting that new roads and sidewalks would require maintenance and new residents would demand public services – all adding long-term cost to the county.

She questioned Miley’s projections on new jobs and private-sector investment, saying many are temporary construction jobs. “Since the same construction crews may be responsible for multiple ... projects,” Gunnlaugsson wrote in an email, “many of the same workers may hold multiple of these temporary jobs over the 22 years.”

Miley said the cost for a typical family of 2.3 people in Richland County would be $106 a year. His estimate – which others would argue is too low – would be offset by the elimination of fees collected for the bus system by Columbia and Richland County.

A good transportation system is “a key component to the growth and success” of any community, Miley said.

He also concluded:

• The tax would generate more than $1.2 billion in economic activity in the Midlands.

• Commuters would save 369,000 hours a year in travel time because of better roads.

Drivers would further save $281 a year in costs associated with maintenance of their vehicles.

• Some 42 percent of the sales tax would be paid by people who shop but don’t live in Richland County.

• New businesses would pay more than $28 million a year in new property taxes to local government within the first decade of collections.

Read the full report

Following the Miley report, find a rebuttal by Wendy Homeyer of the Homeyer Strategy Group.

For fullscreen, download and other options, use the toolbar at the bottom of the document.

Homeyer Group penny tax rebuttal

Reach Hinshaw at (803) 771-8641.

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