Tax Modernization Committee

COLUMBIA TAX MODERNIZATION COMMITTEE MEETING AGENDA TUESDAY, MAY 3, 2022 The Columbia Tax Modernization Committee will conduct a meeting on Tuesday, May 3, 2022 at 10:00 a.m. in Council Chambers at City Hall, 1737 Main Street, Columbia, SC 29201. Members of the public may view the meeting online at www.columbiasc.gov or participate via telephone by dialing 855-925-2801. When prompted, enter meeting code: 4757. During the meeting: press *1 to listen; *2 to leave a message; or *3 to request to speak. For additional information, visit www.columbiacitysc.iqm2.com, call (803)545-3045, or email cityclerk@columbiasc.gov. The Honorable Daniel J. Rickenmann, Mayor The Honorable Joe E. Taylor, Jr., Chair  The Honorable Edward H. McDowell, Jr. Prior to entering the meeting please turn all electronic communication devices to the silent, vibrate or off position. All presenters are asked to speak directly into the microphone for recording purposes. CALL TO ORDER COMMITTEE DISCUSSION 1. Impacts on Richland County and Richland County School Districts 1 and 2 - Ms. Rebecca Gunnlaugsson, Ph.D., President of Acuitas Economics 2. Additional Data and Trends - Ms. Rebecca Gunnlaugsson, Ph.D., President of Acuitas Economics 3. Date, time, and discussion of next committee meeting - The Honorable Joe E. Taylor, Jr., Chairman PUBLIC INPUT ADJOURNMENT Page 1 of 1  1 MEETING DATE: May 3, 2022 DEPARTMENT: City Clerk FROM: Erika Hammond, City Clerk SUBJECT: Impacts on Richland County and Richland County School Districts 1 and 2 - Ms. Rebecca Gunnlaugsson, Ph.D., President of Acuitas Economics FUNDING SOURCE & ORIGINAL BUDGET: ATTACHMENTS:  Tax Plan-2022-0503 Gunnlaugsson (PDF) Updated: 4/28/2022 2:49 PM Page 1 Packet Pg. 2  COLUMBIA COMPETITIVE PROPERTY TAX PLAN 1.a Packet Pg. 3 Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and  1.a Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and COMMERCIAL/RENTAL TOP PICTURE COMPETITIVE TAX PLAN 1 2 3 TARGET DEVELOP CALCULATE COMMERCIAL/RENTAL LEGISLATION PHASE-IN FORMULA Offer a credit to “all other real Draft legislation at: Property tax rate reduction plan property” that would have the State level to enable counties for Columbia/Richland County effect of reducing the the opportunity to implement a would be based on the template assessment rate from 6% to 4%. rate credit for “all other real outlined by Dr. Stephen Walters, Model after Act 40 of 2017, property,” and to be phased in over 10 years. which did the same for County level to opt into the manufacturing property state-legislated rate exemption statewide. opportunity. Slide / 2 Packet Pg. 4  1.a COMMERCIAL/RENTAL Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and COMPETITIVE TAX PLAN Announce an 8-year Build escrow account Use escrowed funds Enact “triggers” that 1 schedule of 2 from new investment 3 and growth in other 4 adjust the tax rate incremental tax rate (and by slowing revenues to satisfy reductions faster/ reductions to begin in spending) during first spending while new slower, based on two years. two years. investment grows, availability of new and tax reductions revenues each year. are phased in. Slide / 3 www.yourwebsite.com Packet Pg. 5  1.a Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and $9,000 $8,869 $8,869 RENTAL $8,000 PROPERTY $7,000 $7,288 $7,288 TAX $6,000 DISPARITY $5,000 $4,000 Rental properties, pay 3.9  times more property tax than $3,000 owner-occupied properties. $2,273 $2,000 $1,873 $1,818 $1,498 Residents aged 65 or older  do not receive the state’s $1,000 Homestead reduction if they rent. $0 Richland School District 1 Richland School District 2 Owner-Occupied 65+ Owner-Occupied Rental 65+ Rental Slide / 01 Packet Pg. 6  1.a Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and RENTER- Rock Hill 48.2% OCCUPIED HOUSING Lexington 33.9% RATE Greenville 56.9% Columbia 53.0% Charleston 44.6% 0% 10% 20% 30% 40% 50% 60% Slide / 5 Source: U.S. Census Bureau, 2016-2020 American Community Survey 5-Year Estimates. Packet Pg. 7  1.a POPULATION GROWTH TRENDS Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and Slide / 6 US Census Population Estimates, 2000 – 2021 (through 2020 for cities and towns). “Revenue Per Pupil Report by School District for 2021-22 Excluding Bond Revenue.” South Carolina Revenue and Fiscal Affairs Office (RFA). Revised Packet 11/15/21.Pg. 8  1.a OWNER-OCCUPIED PROPERTY GROWTH Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and Slide / 7 “School District Detailed Index of Taxpaying Ability” dataset, Tax Years 2010 - 2020. South Carolina Department of Revenue. Packet Pg. 9  1.a COMMERCIAL/RENTAL PROPERTY GROWTH Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and Slide / 8 “School District Detailed Index of Taxpaying Ability” dataset, Tax Years 2010 - 2020. South Carolina Department of Revenue. Packet Pg. 10  1.a CITY OF COLUMBIA REVENUES Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and Slide / 9 Comprehensive Annual Financial Report, FY 2021, City of Columbia. Packet Pg. 11  1.a RICHLAND COUNTY REVENUES Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and Slide / 10 Comprehensive Annual Financial Report, FY 2021, Richland County. *Includes Intergovernmental not restricted to specific program; Sale of capital assets; Investment income; Miscellaneous;Packet TransfersPg. 12  1.a RICHLAND DISTRICT 1 REVENUES Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and Slide / 11 Comprehensive Annual Financial Report, FY 2021, Richland School District 1. Packet Pg. 13  1.a RICHLAND DISTRICT 2 REVENUES Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and Slide / 12 Comprehensive Annual Financial Report, FY 2021, Richland School District 2. Packet Pg. 14  1.a Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and SOURCES TEAM “Revenue Per Pupil Report by School District for 2021-22 Excluding Bond Revenue.” South Carolina Revenue and Fiscal Affairs Office (RFA). Revised 11/15/21. “School District Detailed Index of Taxpaying Ability” dataset, Tax Years 2010 - 2020. South Carolina Department of Revenue. Comprehensive Annual Financial Reports, FY 2021 (FY 2020 where 2021 not available). Cities of Greenville, Charleston, Rock Hill, and Columbia; Town of Lexington; Counties of Greenville, Charleston, York, Lexington, and Richland; School Districts of Richland 1 and Richland 2. Richland County Assessor Property Tax Dataset, Tax Year 2021. US Census Population Estimates, 2000 – 2021 (through 2020 for cities and towns). “Membership Report 135 Day, School Year 2020-21.” South Carolina Department of Education - Office of Finance. SC Constitution Article X, §1(5) (https://www.scstatehouse.gov/scconstitution/A10.pdf) SC Act 40 of 2017 (https://www.scstatehouse.gov/sess122_2017-2018/bills/3516.htm). Source: U.S. Census Bureau, 2016-2020 American Community Survey 5-Year Estimates. Slide / 13 Packet Pg. 15  APPENDIX SUPPLEMENTAL MATERIAL Packet Pg. 16 1.a Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and  Slide / 15 SOUTH CAROLINA PROPERTY TAX FORMULA www.yourwebsite.com Packet Pg. 17 1.a Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and  Slide / 16 EXAMPLE PROPERTY TAX CALCULATION Packet Pg. 18 1.a Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and  1.a 1 2 Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and KEY Commercial, rental, and second home properties “All other real properties” have an assessment rate POINTS are all classified as “all other real property” under of 6%, 1.5 times higher than owner-occupied South Carolina law. properties. 3 4 Owner-occupied SC has one of the lowest properties are further tax rates for owner- exempted from school occupied properties in the operations millage rates. US, yet one of the highest for commercial and rental Slide / 17 properties. www.yourwebsite.com Packet Pg. 19  1.a Attachment: Tax Plan-2022-0503 Gunnlaugsson (7507 : Impacts on Richland County and PEER CITIES CHARLESTON GREENVILLE LEXINGTON Commercial/rental $3,810 $5,339 $8,125 property tax rates are more severe in Richland County than peer locations, not due to Act 388, but due to high WEST COLUMBIA ROCK HILL COLUMBIA combined city, county and school $6,186 $5,859 $7,288 RSD1 millage rates. $8,886 RSD2 Slide / 18 Packet Pg. 20  2 MEETING DATE: May 3, 2022 DEPARTMENT: City Clerk FROM: Erika Hammond, City Clerk SUBJECT: Additional Data and Trends - Ms. Rebecca Gunnlaugsson, Ph.D., President of Acuitas Economics FUNDING SOURCE & ORIGINAL BUDGET: Updated: 4/28/2022 2:49 PM Page 1 Packet Pg. 21  3 MEETING DATE: May 3, 2022 DEPARTMENT: City Clerk FROM: Erika Hammond, City Clerk SUBJECT: Date, time, and discussion of next committee meeting - The Honorable Joe E. Taylor, Jr., Chairman FUNDING SOURCE & ORIGINAL BUDGET: Updated: 4/27/2022 12:40 PM Page 1 Packet Pg. 22