Keeping taxes could help pay off pension debt, city treasurer says
Charleston Mayor Danny Jones believes his proposal to cut some taxes while raising others is the best way for the city to pay for renovations to the aging Civic Center despite another local official's opposition.
City Treasurer Vic Grigoraci discussed the plan during a public hearing Monday night during the regularly scheduled council meeting.
Jones is proposing a half-cent city sales tax to pay for renovations to the Civic Center. He is also proposing to roll back the business and occupation tax on retail from .5 percent to .35 percent.
Jones is also proposing the elimination of the city's B&O tax on manufacturing.
The reduction in retail B&O would cost the city $2.25 million annually. The elimination of the manufacturing B&O would result in a loss of about $350,000 a year.
However, the new city sales tax is projected to generate about $6.17 million annually. So the city would net about $3.5 million a year to pay for the renovations.
Grigoraci said that although he supports implementing the half-cent sales tax, he opposes reducing and eliminating the city's B&O taxes on retail and manufacturing.
He believes the city could use the other $2.6 million generated by the sales tax to pay off the unfunded pension liabilities in the firefighter and police plans.
"I do not support giving up this money," he said. "Imagine what we could do with that money."
Not only could the city pay off its unfunded pension liabilities much quicker, it could also invest in other city-owned facilities and parks, Grigoraci said. The funds could also be used to help fund construction of a new public library, he added.
But Jones believes his proposal is the "best package."
"We don't just want to increase people's taxes," Jones said. "We want to give some tax relief."
Jones believes eliminating the B&O tax on manufacturing will show companies Charleston is serious about encouraging growth in the city.
"We want manufacturers to know that if they locate here, we're not going to charge them," he said.
The $3.5 million generated every year will be used to pay off up to $60 million in debt incurred while renovating the Charleston Civic Center.
The city must apply to the state Home Rule Board for permission to implement the sales tax. A bill introduced into city council Monday night would authorize the mayor to make the application to the state board.
The bill will be discussed at a city Home Rule Committee meeting on April 10 at 6:30 p.m. in the third floor conference room at City Hall. All meetings are open to the public.
Jones has indicated that the state Legislature will probably prohibit any cities from implementing new taxes under a new home rule program. Charleston was one of four cities that received home rule under the pilot program that expires on June 30.
Therefore, the city must pass the new sales tax before the program expires on June 30, Jones said in a previous interview.
Council should read and vote on the ordinance allowing the mayor to apply to the Home Rule Board by the April 15 meeting, City Manager David Molgaard said.
Council must also vote on another ordinance, one that actually implements the city sales tax, if the Home Rule Board approves Charleston's request.
"This (ordinance) isn't the end, it's the beginning," Molgaard said of bill introduced Monday night.
In other council news:
Council members agreed to apply for a $400,000 federal grant to help pay for software upgrades at the city police department.
Council also approved a change order with Michael Baker Jr. Inc. in the amount of $77,270 to formulate construction plans for the Farnsworth Drive Bridge over Interstate 77/64.
The bridge has not been significantly refurbished since it was constructed when the interstate system in Charleston was completed, City Engineer Chris Knox said.
The decking on the bridge will be replaced and the bridge is to be painted, he said. One lane of the bridge will be closed at a time in order to keep it open for traffic, Knox said.
Knox hopes to have the bridge deck completed by the end of the summer, he said. Contact writer Paul Fallon at firstname.lastname@example.org or 304-348-4817. Follow him at www.twitter.com/PaulBFallon.