What other SC penny tax programs have gotten Richland County levels of scrutiny?
The S.C. Department of Revenue said Richland County is not the only penny program the agency has reviewed, although the department declined to say if it has audited the state’s other big sales tax-funded roads programs.
When the department released its long-awaited audit of Richland County’s penny tax roads program — which told the county it would have to repay $32 million in misspent funds raised by a penny sales tax since 2012 — the chairman of Richland County Council said the county’s was “the only transportation program to be audited by SCDOR.”
“Richland’s program was modeled after another successful transportation penny program in this state, namely Charleston,” said Chairman Paul Livingston in a statement about the DOR audit. “However, there are others, including Beaufort County, with similar structures.”
Charleston County voters approved a half-cent sales tax in 2004, covering a similar range of projects to Richland’s. Charleston’s program, projected to raise $1 billion, was dedicated to improving highways, roads, streets, bridges, and other transportation-related projects and drainage facilities, according to a Charleston County website dedicated to the program. It even included $221.5 million for the Charleston Area Regional Transportation Authority (CARTA), similar to the portion of Richland’s penny tax that supports the Comet bus system.
Also like Richland’s program, Charleston County’s was initially managed by an outside group. Between 2004 and 2009, “Charleston County contracted with a program consultant due to the County’s lack of necessary staff to manage large transportation projects,” according to the county site. In 2009, Charleston had enough experienced staff in place to form its own transportation development department, now a part of Charleston County Public Works.
Richland County had a similar agreement with a consortium of private companies to manage its penny, until cost concerns led Richland County to move the penny tax roads program in-house last year.
While DOR declined to comment on what, if any, oversight it has provided for other county-operated roads programs, state tax authorities did point to other instances where it stepped in to a penny tax referendum.
While not auditing the program, DOR previously took Florence County to the state Supreme Court in an attempt to stop the county from moving forward with a new penny tax in 2013.
At the time, Florence County was hoping to hold a second referendum to reimpose its own penny-tax roads program. But DOR also questioned how that program was spending money, and on what.
Tax officials said Florence County was on course to finish its original program, approved by voters in 2006, about $7 million short of the original goal needed to complete all of its projects — the 2008 financial crisis and resulting recession having intervened in the meantime.
Because of this shortfall, DOR argued the county could not ask voters for another $145 million on a separate list of new road projects. The department also dinged Florence for holding the vote in an off-year election of 2013.
But the Supreme Court ruled both of DOR’s objections irrelevant for the question of holding a tax referendum.
“If and when a county does not complete a project for which the voters approved a tax, then the voters may decide whether they wish to continue the tax to fund another project,” the court ruled in a unanimous decision.
Florence County argued at the time that it would raise enough money to complete the remaining projects in the first penny list. Today, the county has nearly completed the projects from the successful 2013 referendum, which extended beyond road work to include new fire and EMS stations in some portions of the county. Florence voters will even be asked to approve a third round of the sales tax on Nov. 3.
Despite the original tax expiring in 2014, one road project — improvements to Alligator Road — is still outstanding, although the county has the funds to complete it, said County Administrator Rusty Smith.
DOR is also currently auditing an education-related penny tax in Kershaw County, said DOR spokeswoman Bonnie Swingle. Voters approved that program in 2016 with the goal of renovating several Kershaw County schools and building new ones.
But in comments to The State, Livingston said those cases aren’t directly comparable to Richland’s penny tax program.
“I don’t think that’s a valid comparison at all,” he said. “The main point is that what we’re doing is not unique. It’s not different from what anyone else is doing,” in other transportation programs.
Livingston declined to comment on why he thought the Department of Revenue was treating Richland County differently from other penny-tax programs.
“I won’t get into that right now,” he said.
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