COLUMBIA SC — SCE&G customers in Columbia are to see a reduction in their monthly utility bills before the taxman starts collecting an extra penny-on-the-dollar sales tax this spring.
But when ratepayers will see the break is unclear.
Columbia City Council on Tuesday cast the first of two votes to lift a 2 percent franchise fee it imposed two years ago as a way of sustaining the struggling metropolitan bus system.
Council did not say specifically when the fee would be lifted, but inserted a provision stating that at no time would any South Carolina Electric & Gas Co. customers within the city limits pay both the fee and the higher sales tax.
The fee generated between $3.5 million and $4 million annually from residential and commercial utility customers, according to the citys finance office. The money went to Central Midlands Transit Authority, which at the time was facing deficits as high as $3 million.
The fee shows up on monthly power bills and is charged to SCE&G for the use of its power lines that are in the public rights of way. The utility company passes the expense on to in-city customers.
Critics of the sales tax referendum that was approved in November had complained that city residents and businesses would be paying twice for the bus system under the fee and sales tax arrangement.
In response to tax-increase opponents, council pledged last fall that it would stop the transit fee if the controversial sales tax won approval. Tuesday, council took its first step toward fulfilling that promise. A second vote is required before the change is legal.
Neither council members nor the city attorney were sure Tuesday night when the sales tax increase would go into effect. On Monday, Richland County Treasurer David Adams said plans are to start collecting 8 cents on the dollar instead of 7 cents as of May 1.
Still, the ordinance council voted on states that the fee will return to its previous 3 percent from the current 5 percent as of June 30, 2013.
The timing of the switch also is in question because the referendum has been challenged in court as illegal and is awaiting a ruling by the S.C. Supreme Court.
If the justices OK the tax increase, the bus system would receive $311 million during the 22-year life of the extra penny tax. That translates into an average of about $14.5 million yearly, said Bob Schneider, who oversees the daily operations of the buses.
In other action, council made no decision about moving one of the citys best known pieces of public art, The Plug, a fire hydrant sculpture by artist Blue Sky. Council discussed several sites within Finlay Park including adding a splash pad for children. But council asked that city staffers come up with a plan for how such a feature would fit into design plans for the downtown park.
Reach LeBlanc at (803) 771-8664.