WHILE COLUMBIA may well need to search for ways to limit the burden on taxpayers while still boosting the general fund, you’ve got to think that at some point in the next few years that task will get a little bit easier.
New property taxes generated by what is predicted to be gang-buster growth in the city have to begin rolling in at some point, don’t they? And when they do, there should be less of a need to conjure up ways to bolster the general fund. For sure, the practice of robbing water and sewer to pay for police and other services typically funded through the general fund should cease, although I’m sure city officials will continue to look for ways to get those entities that don’t pay property taxes to contribute to operating city services.
It’s not a case of if new tax dollars will flow into the city; it’s when. And, more than that, it’s whether city leaders will make the right decisions about how to allocate that money.
Before they spend on anything new, they should put a complete stop to the water and sewer transfers so that the account can be dedicated to maintaining the utilities. The water and sewer system is in as bad a shape as it is in part because of the council’s annual more-than-$4-million raid on the fund.
But if the mammoth public investments, along with significant private investment, underway and on the way in the city are fruitful — and I’m a believer — there’s no reason those transfers can’t be a thing of the past, and no reason to believe that relief isn’t on the way for the general fund.
In case you’ve forgotten, let’s recap some of what’s projected to come into the city.
In a study of the Bull Street development known as Columbia Common, economist Harry Miley projected that it would produce an annual economic impact of $1.2 billion as well as 11,020 jobs. More to my point, he projected that it would generate $19.9 million in property taxes annually by the 20th year for the city of Columbia, Richland County and Richland School District 1.
Obviously, there’s nothing there to generate any real revenue at the moment. But the new baseball park is under construction and is set to open next spring, and other new development is expected to open along with it. Thereafter, even more building is expected to take place. In the next five years, some amount of new tax dollars should begin flowing into the city’s coffers.
But there’s more: In a separate study, of the Richland County transportation penny program, Dr. Miley projects it will generate more than $1.2 billion in economic activity and create more than 16,500 jobs in construction and new industry. He also predicts that new businesses will pay more than $28 million annually in new property taxes within the first decade. Columbia will claim some portion of those new tax dollars.
And there’s yet more: Many new restaurants, hotels, condos and student housing are rising around the city. Oodles of privately developed student housing, in fact. While the amount of taxes generated by student housing will be stunted by the city giving away half those taxes for the first decade, what does come in will add to the kitty.
Yes, some of that revenue will have to be spent to provide services to more people, but the good thing about commercial growth is that it more than pays for itself.
And yes, it will take time for those tax dollars to grow to a substantial annual sum, but if the city uses incremental dollars wisely, it won’t be as reliant on a plan such as the one Mayor Benjamin has put together, which reduces water and sewer transfers and replaces the loss in the general fund by creating a new water and sewer transfer to help fund public safety and increasing the electric franchise fee so that owners of tax-exempt property help pay for services. In all of this, a proposed water and sewer rate increase would be reduced from 12.1 percent to 9.5 percent and property taxes would be rolled back 2 percent to offset the electric franchise fee increase.
But fee and rate hikes alone aren’t going to fully address the concern about the large amount of tax-exempt property in the city. And while raising certain fees will mean that government property and churches and others such as USC will contribute to city operations, there also will be those who get pinched in the process. Renters pay property taxes through their lease (which won’t be reduced, I’m sure) and also pay water and sewer rates as well as the franchise fee.
When it’s all said and done, the real remedy for the general fund is going to be growth, which is one reason I don’t understand this notion of giving student apartment complexes that are going to come here anyway a 50 percent break on taxes for their first decade in existence.
Just the same, there’s no doubt that Columbia is on a decided upward trajectory that should carry the general fund along with it. Let’s hope the council uses it wisely.
Reach Mr. Bolton
at (803) 771-8631 or firstname.lastname@example.org.