Bolton: Columbia and other local governments relying more on fees

Associate EditorJune 21, 2013 

WHILE COLUMBIA City Council has kept its promise to avoid property tax increases in recent years, it has made no such pledge about user fees, which are starting to tick upward.

And Columbia isn’t alone, although it’s been among the most active in increasing fees. Richland County and other local governments, all attempting to meet growing needs while being stymied by a poor economy and a state-mandated cap that limits the amount of money cities and counties can raise via property tax increases, also are turning to fees to help balance their budgets.

Columbia has increased a number of fees in recent years and it continued that trend Tuesday when City Council approved wide ranging rate increases for park services. The changes go into effect July 1 and affect everything from the cost of playing team sports to fees for renting city facilities. Not only will those who rent a city park pay higher rental fees, but they also will have to pay city workers to set up and clean up. In addition, fees for summer and sports camps are on the rise, with the cost of six-week classes for adults and children doubling and even tripling.

Despite the increases, Columbia officials and consultants note that the city will still generate significantly less money for recreation than it costs to provide the service.

Last year, the city increased hydrant and stormwater fees as well as parking fines — the cost for expired meters, parking in no parking zones and leaving keys in the car all went up.

In addition, water and sewer fees were increased both last year and this year and are expected to rise in coming years as well. Those increases have been implemented in large part to pay for the operation and maintenance of the water and sewer system.

But for years Columbia officials have routinely transferred money — $4.5 million annually in recent years — from the utilities fund to help keep city property owners’ taxes from rising.

Columbia officials argue that city residents own the system and should benefit from the enterprise. But increasing water and sewer fees and using some of that money for general fund purposes is essentially another way of assessing residents to help pay to operate the city. At least city residents benefit from the practice; those customers who live outside the city pay around double for water and sewer and don’t benefit from the transfers that bolster city operations.

That said, plans to increase water and sewer rates in coming years aren’t aimed at boosting the general fund. Instead, consumers are having to pay more to pay for hundreds of millions of dollars in much-needed improvements to the city’s aged water and sewer system. An upcoming consent decree with the Environmental Protection Agency will mandate millions in upgrades for the sewer system.

With city officials pointing out that the fee increases they’ve instituted — whether for parking on city streets or meeting in city parks — are modest and that similar fees in like cities are higher than those in Columbia, chances are good we could see more hikes in the future.

But, as I said, Columbia isn’t the lone local government beginning to rely more on fees. Richland County Council is considering a 2 percent increase in many of the fees people pay as they conduct business with the county, covering everything from developers to engaged couples. Sick people would pay more to be transported by ambulance and people in love would pay more for marriage licenses. And, going forward, fees would be adjusted by the rate of inflation each year. County officials said that fees haven’t been adjusted in years.

What does this all mean? It’s understandable that local governments are turning to fees considering the limited sources available as they search for ways to continue providing quality services for their communities.

The truth is they’re in quite a predicament with federal and state funding dwindling and having restrictions on property taxes, their major source of funding. State lawmakers have long needed to give local governments more options to raise revenue other than a property tax. The few options legislators have provided — mainly sales tax options — come with stipulations that dictate how the revenue can be used. For example, the hospitality tax can only be used for tourism-related projects.

That said, local governments must be careful to monitor efforts to raise more money through fee increases. While it may be reasonable to increase some of those costs, cities and counties shouldn’t rely too heavily on fees, which can be among some of the most regressive of charges.

No, they’re not at that point yet, but the best way to ensure that they don’t get there is for them to be responsible and intentional about monitoring fee increases.

Reach Mr. Bolton

at (803) 771-8631 or wbolton@thestate.com.

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