Opinion Extra

Richland audit found no ‘impropriety’ — not ‘smart spending’

The Richland County Council used restaurant tax money to purchase what it now calls Pinewood Lake Park, and continues pumping money into it, based on the belief that it will draw tourists to the county. Seriously.
The Richland County Council used restaurant tax money to purchase what it now calls Pinewood Lake Park, and continues pumping money into it, based on the belief that it will draw tourists to the county. Seriously. tglantz@thestate.com

RICHLAND County officials announced last month that an internal audit “did not reveal any instances of malfeasance or impropriety” in the program that collects a 2 percent tax on restaurant and bar tabs and spends it on frivolities.

If the audit’s findings are solid and meaningful, that’s good to know. But it doesn’t mean the money was spent well. And it doesn’t mean the program would be justified even if the money were spent as well as state law allows.

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Read the audit

Richland’s review of millions in meal-tax uses finds no evidence of misspending

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The independent news site Quorum has reported that there was in fact impropriety, of the sort that prompted several law enforcement investigations. But that hasn’t been confirmed on the record, so let’s just concentrate on what we know for sure.

We know for sure that over the past three years the County Council kept giving tax money to private organizations that violated county requirements to report how they spent the money.

We know that while about $6 million went to established tourist attractions (Columbia Museum of Art, EdVenture, etc.) and $1.4 million was awarded through a competitive grants program, about $5.7 million was awarded through what the county calls “council sponsored funding requests” — which most of us would call pork-barrel funding.

We know that all five organizations that violated the reporting requirements at least two years in a row were on the pork-barrel funding list. Which you can be sure is no coincidence: This is what happens when funding is dependent on political patrons rather than rules and regulations.

We know that one of those five noncompliants was a secretive organization that calls itself Second Chance Afterschool Learning Environment, which would be a bizarre kind of organization to receive funding that under state law must be spent to attract tourists — if it actually had anything to do with education, which apparently it does not.

This is where it’s good to explain the hospitality tax, which is charged on restaurant and bar bills and some foods sold in grocery and convenience stores. State law allows counties or cities to impose the tax at either 1 percent or 2 percent, but there’s a huge catch: The money can only be spent on activities to attract tourists.

That would be bad enough, since state law severely restricts how much money cities and counties can collect to pay for police and firefighters and other essential services, and this tax revenue can’t be spent for any of that. But the law has the most bizarre definition of a tourist you’ll ever see: “a person who does not reside in but rather enters temporarily, for reasons of recreation or leisure, the jurisdictional boundaries of a municipality for a municipal project or the immediate area of the project for a county project.”

That means someone who lives just outside the city limits becomes a tourist if she walks across the street to an event just inside the city. It also means that a “tourism-related” project is anything that entices someone to walk across the street into a city. So cities and counties are still barred in most cases from using this money to pay for police or fire service or other essentials, but they can spend it on boondoggles that are not going to actually draw new people into the community — like, say, an overgrown pond in Lower Richland that one council member has delusional plans of turning into a tourist mecca.

That overgrown pond, by the way, is called Pinewood Lake, and the private foundation that’s been managing the project filed a 2016 report with the county that was, according to the audit, “not in accordance with the guidelines.” It’s also one of the projects that was awarded a contract by someone who the county administrator says was not legally authorized to award a contract.

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More than 20 Richland contracts were improperly signed, administrator says

Richland group’s mission, funding raise questions

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Back to Second Chance, which owns part of the Pinewood Lake property and, like the Pinewood Lake project itself, has as its political patron Councilman Norman Jackson. When our newspaper reported last year that it had received $166,000 and was in line to receive another $75,000 this year despite ignoring the county’s reporting requirements and having “no accomplishments related to its mission and no correct address provided to the IRS,” Richland County Council members were shocked. Shocked.

But what shocked them was, well, shocking: Told that the money was awarded to run a reggae concert and a parade, Councilman Bill Malinowski, for instance, noted that those activities don’t “seem to have anything to do with learning or helping kids.” Of course, if they did have anything to do with learning or helping kids — the organization’s mission — it would be a clear violation of state law. Since those are, arguably, important.

County Administrator Gerald Seals is right to order his staff to do a better job monitoring tax recipients’ compliance with their contacts. But as long as the council awards nearly half the hospitality tax money through its pork-barrel funding mechanism, don’t expect that to make make much difference.

Ms. Scoppe writes editorials and columns for The State. Reach her at cscoppe@thestate.com or (803) 771-8571 or follow her on Twitter or like her on Facebook @CindiScoppe.

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