Editorial: Restaurant tax ruling should spur change in SC law

November 3, 2013 

— THE BIGGEST problem with the requirement that local restaurant taxes must be used for “tourism-related” spending is that it encourages cities and counties to spend money on festivals and sporting complexes and other things that are nice but not essential, even while they scrimp on police and fire and other essential services.

And because “tourism” isn’t directly defined — and even less defined is the mandate that the spending be “tourism-related” — it has provided a huge temptation for local officials to push the envelope. As they do constantly.

What this means is that Richland County and Columbia and the growing list of other cities and counties collecting the tax are not only squandering tax money. They’re compromising their integrity, and so further diminishing trust in our government.

Now that a Circuit Court judge has sided with the law-skirters — saying that since the Legislature didn’t say whether “tourism-related” meant just for tourists or mostly for locals but maybe occasionally used by tourists, it could mean the latter — things are only going to get worse.

Which is yet another reason our Legislature needs to change the law.

Tourism officials, of course, want to change it to make sure local governments can use the tax revenue only on projects that will draw more tourists to the area.

Changing the law so that “tourism-related” means a project whose primary purpose is to attract actual tourists would indeed address the skirting-the-law problem. But it doesn’t address the much more significant problem of local governments squandering money.

The way to do that is for the Legislature to stop micromanaging our communities and remove the restrictions on how local governments can spend their tax money.

In fact, legislators shouldn’t just remove restrictions on how local governments spend hospitality tax money or sales tax money in general. They should remove the restrictions on how local governments spend tax money. And what taxes they can levy. And how much they can levy. Then maybe instead of loading us all down with ridiculously high sales taxes, our cities and counties might be able to create a more balanced and stable tax system, one in which none of the individual taxes is terribly high.

The point that our state legislators never can seem to come to terms with is that city and town and county council members are elected from their communities to serve those communities, and they know better than the Legislature what their communities want.

Instead, we have a situation in which Richland County legislators tell Greenville officials what they can and can’t tax, and Charleston County legislators tell Lexington County officials what they can and can’t tax, and on and on across the state. If it weren’t so tragic, if it weren’t doing so much to keep our communities from reaching their potential, it would be laughable that this is the modus operandi for lawmakers who profess to value local control.

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