Richland County reaches settlement with state agency on multi-million penny tax feud
A long-running dispute between Richland County and the S.C. Department of Revenue over the county’s penny road tax has been resolved, the county said.
Richland County announced in a news release on Wednesday it had reached a settlement with the Department of Revenue over penny tax spending that state tax authorities had challenged as improper.
“We want to focus on new and better ventures and moving the county in a positive direction,” Councilwoman Cheryl English said.
Under the settlement, Richland County will not have to pay any money to DOR, but will make an additional $15.5 million investment into the program to improve the county’s roads. The county’s statement also states there was no finding of fraud in DOR’s audit of the program.
“We believe this resolution is in the best interest of everyone, providing much needed clarity for the expenditure of Penny Tax funds,” the Department of Revenue said in a statement. “This settlement ensures accountability, transparency, and compliance by establishing formal guidelines for Richland County and all counties with a transportation penny tax. This is an important step in restoring public confidence in the Penny Tax Program.”
The $15.5 million will come from the county’s general tax money fund, according to spokesperson Beverly Harris.
“County officials view the settlement as an opportunity for taxpayers to reestablish confidence in the program that voters approved nine years ago to fund infrastructure improvements,” the statement reads.
DOR had challenged more than $40 million in Richland County’s spending since the penny sales tax was approved by voters in a 2012 referendum. That included money spent on coffee, cars and computers for the Program Development Team, an outside group of construction firms that jointly managed the program until 2019.
The Revenue Department had insisted county taxpayers could be on the hook for paying back those sums into the program.
“For the citizens, our employees and this Council, it was time to put this dispute behind us and focus on delivering the penny tax projects approved by our citizens,” Council Chairman Paul Livingston said in a statement.
Richland County also touts the management of the program since the penny was moved in-house from an outside management firm in late 2019, although the director of the county’s transportation department was recently fired.
The program had at one point faced a $154 million deficit brought on by increasing construction costs as the program went on, but the county council approved a modified plan moving forward last year.
”We’ve taken steps in the past two and a half years to rein in overspending, improve management, and increase accountability,” Councilwoman Chakisse Newton said after the settlement was reached. “We’ve made good first steps to fix the problems of the past and we need to continue to be more accountable and transparent about how we got here and how we manage the program moving forward.”
This is a developing story. Check back for more details.
This story was originally published July 21, 2021 at 11:38 AM.
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