Millions owed to SC taxpayers over local road fees, lawsuits contend
By RICK BRUNDRETT
Nearly half of South Carolina’s 46 counties were charging annual road maintenance fees as of last December, records show, though the state’s top court earlier this year in a Greenville County case ruled that its fee was unlawful.
Whether taxpayers will receive any refunds remains to be seen. Class action lawsuits seeking multimillion-dollar refunds have been filed in at least seven counties – Aiken, Beaufort, Georgetown, Greenville, Horry, Richland and Sumter – since the June court ruling, which did not order refunds in the Greenville County case.
Most of the suits cite a state law that would allow the plaintiffs, if successful, to be awarded 10 times the amount of the collected road fees, The Nerve’s review found.
“That first ruling (June Supreme Court ruling) was there would be no refunds,” Edgefield County auditor Bill Gilchrist told The Nerve when contacted Tuesday. “That might not be the case down the road.”
Gilchrist said the county council voted to repeal its $27 per-vehicle road fee after the Supreme Court ruling, though county treasurer Arlene Traxler in an email response said the council last month increased its operating tax levy to “capture the lost revenue.”
Aiken County administrator Clay Killian an email response Tuesday said his county has “no plans to remove the current maintenance fee” of $25 per vehicle, though he noted the city of Aiken rescinded its $20 fee. He said the county collects about $4 million annual from its road fee.
The lawsuit against Aiken County and the city of Aiken contends the county “continues to collect and retain these illegal fees,” while the city has “not returned any of the illegally collected fees.”
Records with the South Carolina Association of Counties (SCAC), a nonprofit education and lobbying organization, show that 22 counties as of last December were collecting annual road fees, either on a per-vehicle or flat-charge basis, ranging up to $50 per vehicle in Horry and Georgetown counties.
In Beaufort County, in addition to the county fee of $16.50 per vehicle, the towns of Hilton Head Island and Bluffton each were charging $25 annual fees for road maintenance as of last December, SCAC records show. The town of Hilton Head Island is a defendant along with the county in the Beaufort County lawsuit, which notes the county has collected an estimated $15.8 million in road fees since 2015, and a projected $4.9 million on behalf of Hilton Head Island since 2016.
The county has not repealed its fee, while Hilton Head Island suspended collection of its fee “but to date has not returned any of the illegally collected fees,” the suit contends.
In an email response today, Beaufort County spokesman Chris Ophardt said the county “reverted to its pre-1997 road user fee of $10.00” following the Supreme Court ruling, adding, “Beaufort County is currently reviewing the recent complaint (lawsuit) and will address the matter during court proceedings.”
The Greenville County suit contends that the county has received an estimated $30 million from road maintenance and public safety telecommunications fees since separate ordinances authorizing those fees were enacted in 2017. The county had been collecting a $25 per-vehicle road fee and a $14.95 per-parcel telecommunications fee, according to the suit, which noted that the county council voted “not to return the illegal fees” after the Supreme Court ruling.
“This is the epitome of bad government; taking money illegally from citizens, and, after the South Carolina Supreme Court reprimands them, the government actors still refuse to return the ill-gotten fees,” according to the suit, which was filed by a county resident on behalf of himself and others who paid the fees.
Bob Mihalic, the county’s governmental affairs coordinator, in an email response today contended the Supreme Court found that a $10 increase in the road fee was “invalid,” not the total $25 amount.
“The $15 (road fee) is grandfathered, and still valid and remains,” he said.
Georgetown County has collected a total of about $27 million since 2007 from its county road fee – now at $50 per vehicle – though the ordinance authorizing the fee wasn’t repealed, nor were any refunds issued following the Supreme Court ruling, according to that lawsuit. A separate suit against neighboring Horry County contends the county collects about $17 million annually in road fees.
Asked this week whether Georgetown County Council plans to rescind its road fee and issue any refunds, county spokeswoman Jackie Broach declined comment, citing the pending suit.
In Lancaster County, county administrator Dennis Marstall in a written response Thursday said the “matter is being reviewed by legal staff.” In the meantime, the county road fee, which was adopted before the state law at the center of the Supreme Court ruling took effect and will increase in January from $35 to $40 per vehicle, will “remain in place until such time that County Council or a court of competent jurisdiction dictates otherwise,” he said.
In her email reply Wednesday, Lee County treasurer Lisa Baker said, “As far as it stands currently, our County Administrator along with the County Attorney are working toward a decision on how best to address the matter.” The county’s annual road maintenance fee is $15 per vehicle, she said.
Most of the counties that impose road fees didn’t reply this week to The Nerve’s written questions. Timothy Winslow, the SCAC executive director, didn’t respond to a question about what his organization has been advising counties in the wake of the Supreme Court ruling.
In their June 30 decision, the five justices said Greenville County’s road and telecommunications fees violated a state law requiring that “uniform service charges” imposed by a local government benefit the “payer in some manner different from the members of the general public not paying the fee.”
“We find the charges are taxes,” Justice John Few wrote on behalf of the court. “State law prohibits local government from imposing taxes unless they are value-based property taxes or are specifically authorized by the General Assembly. Neither is true for these two ordinances.”
“Local governments, for obvious reasons, want to avoid calling a tax a tax,” Justice John Kittredge added in a concurring opinion. “I believe today’s decision sends a clear message that the courts will not uphold taxes masquerading as ‘service or user fees.’”
Brundrett is the news editor of The Nerve (www.thenerve.org). Contact him at 803-254-4411 or firstname.lastname@example.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.
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