Cindi Ross Scoppe

Is county spending road money legally? Wisely? The jury’s still out

IT WAS NO surprise that Circuit Judge Thomas Cooper said the state Department of Revenue can’t withhold transportation tax revenue from Richland County just because it doesn’t like how the county is spending the money. The county brought the state constitution and the law and precedent and logic to the courtroom on Tuesday; the state brought a penumbra — a power implied but not spelled out in law.

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However, that penumbra proved more potent than it appeared; the judge said the Revenue Department does have the authority to challenge how Richland County spends the money the agency collects. But it has to convince a judge that its objections are valid, rather than acting unilaterally to right what it sees as a wrong.

Whether the state can do that is one of the big questions that remain 15 months after it started investigating the county’s penny transportation tax program. It is far from the only one.

While the immediate legal question has been settled, at least for now — the county can keep paving and widening roads without complying with the Revenue Department’s requirements — the fundamental questions remain.

Judge Cooper did not say the law allows Richland County to spend money the way it has been spending it. He merely said the state has not proved the money is being spent improperly — as anyone who read the state’s legal briefs could have told you.

Judge Cooper did not say the county has been spending money wisely, or responsibly, or in a way that shouldn’t get all the council members kicked out. I’m not sure they should all be kicked out, but they’ve clearly made wasteful decisions.

And his order tells us nothing about what, if anything, is going on with a criminal investigation the Revenue Department says SLED is conducting at its request. Innuendo — and the department’s legal papers are replete with innuendo — suggests that council members got illegal favors when they rewrote their bidding rules and entered into a contract with a “program development team” to run the $1 billion roads program. But it’s hard to know how seriously to take that innuendo given how reckless the agency has been with its talk of criminality.

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State law clearly says that money raised by a county’s 1 percent sales tax for transportation can be spent only on transportation projects. I think the Revenue Department has a good argument when it says, for instance, that the county couldn’t use this money to create a small-business enterprise program to work on all county contracts. A similar charge about a grossly wasteful mentor-mentee program is also compelling, although this might fall closer to the “irresponsible” line than the “not legal” one.

But the agency has chosen an aggressive reading of the law that the county says limits its ability to use transportation money to cover administrative costs associated with the roads program. Judge Cooper didn’t rule specifically on that claim, but the county made a strong case that the agency is misreading the law.

And here’s where it’s important to note that when the Revenue Department refers to “an unlawful civil conspiracy” and other illegalities, it’s not talking about whatever criminal allegations SLED is looking into.

It’s saying the county and its contractors engaged in a conspiracy by using the penny tax funds to pay for administrative expenses they say are tied to the roads program. It’s saying there’s been some double-dipping: that some of the people who are part of the program development team also have a stake in the company running the bus system and companies that got those ridiculously overpriced public-relations contracts.

Is this distasteful? Absolutely. Do I think the County Council members ought to answer for it, and make some changes? For sure. But on its face, it does not even hint at illegality. For that we would need reason to believe that public officials were rewarded for the decisions they were making about the program. The fact that they gave a bunch of contracts to the same people simply suggests that they’re giving contracts to their friends — which is unseemly and probably wasteful but, absent any financial gain, not illegal. (Note the parallels in George Will’s column that’s posting this evening about the criminalization of politics.)

If there was anything surprising in Judge Cooper’s order it was his declaration that the Revenue Department has a fiduciary responsibility for the revenue it collects, and so has the authority to bring a lawsuit to try to prove the county isn’t spending the money properly — which I assume it will now do.

If he’s right, if the agency has the authority to challenge how the county spends the tax dollars it collects, that means it also has the authority to challenge how the Legislature spends tax dollars. And the implications of that are mind-numbing. Or not.

It’s hard to imagine that any state agency would challenge how the Legislature spends money, because we know what would happen next: The Legislature would strip the agency of that authority, and likely take other punitive actions — neither of which, thankfully, the Richland County Council can do.

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

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