More and more pennies: Richland could now ask voters for $4.5B transportation tax

A possible proposal for a new Richland County transportation penny sales tax has ballooned to some $4.5 billion – double a $2.2 billion, 15-year collection being mulled earlier this year – that would pay for roads, sidewalks, buses and other transportation-related projects across the county over the next quarter-century, if the county’s voters approve it this year.

The increased ask comes from a long list of transportation needs identified in a report presented to council in late 2023, which found the county needs $8 billion of transportation work over the next 25 years.

The new 1-percent sales tax, if voters approve it in November, would collect nearly four times more money than what voters approved in 2012.

In 2012, voters accepted a penny tax that would collect $1.07 billion over 22 years, but the county is set to reach that collection limit by the end of 2025 – about 10 years early. Once the full $1.07 billion is collected, the tax approved in 2012 will expire.

County leaders have said they worry about how the county will pay for new intersections, new sidewalks and other major roadway needs if voters don’t approve another penny tax this November.

Who gets what

Beyond the question of if voters will approve the tax at all is the question of how to split the $4.5 billion if it is accepted by voters in November.

Richland County Council on Tuesday passed a plan that would put 50% of the money toward community investment projects – think improvements to existing roads, paving dirt roads, adding new sidewalks and greenways and other pedestrian improvements. Thirty percent of the $4.5 billion would go toward expanding transportation infrastructure, focused on new construction and improvements for major roadways and intersections.

The remaining 20% of the $4.5 billion would go toward operating the COMET bus system.

The plan passed an initial vote, but not without disagreement among council members. Council members Paul Livingston, Allison Terracio, Overture Walker and Chakisse Newton voted against the proposed divisions.

Terracio and Walker both shared concerns about whether the COMET will have enough money to function at current levels.

Terracio, who is the council’s liaison to the COMET board, said she did not think the COMET would be able to make any improvements without more than 20% of the $4.5 billion and said it may not even be able to maintain its current level of operations, as costs are expected to rise in coming years.

“Without the penny sales tax, public transit in Richland County would be nonexistent,” Walker added.

Each of the county’s 11 districts would also be guaranteed at least $20 million worth of projects from the $4.5 billion under the plan approved Tuesday, addressing longstanding concerns that some parts of Richland County have reaped the majority of the benefits from the tax while other parts of the county still struggle with few sidewalks and deteriorating roads.

A 2020 analysis by The State newspaper showed that nearly $1 out of every $6 the county planned to spend on referendum roadway projects directly benefited the University of South Carolina and its sports facilities, for example.

“We’ve talked about geographic equity,” said Ccouncilman Don Weaver, whose district includes Forest Acres. “I’ve got folks carrying groceries home from Walmart on Percival Road without a sidewalk.”

Council woman Gretchen Barron agreed that the money must benefit every council district.

“I’m concerned whether or not District 7 would get its fair chance,” Barron said, adding that she supports the plan to ensure every council district is guaranteed at least $20 million.

The council also has a list of projects that are expected to be paid for with the new tax, including $624 million worth of road widening projects, $85 million for pedestrian safety projects and $28 million for the construction of new roads, among a laundry list of other projects.

Penny tax impact

The penny tax has been controversial in Richland County for years. When the county first tried to get voter support for the tax in 2010, it was rejected. And even after voters approved the tax in 2012, its management was heavily scrutinized.

In 2015, the South Carolina Department of Revenue began questioning how the county was using the sales tax money. The Department of Revenue alleged that the county was unlawfully spending millions of dollars on non-transportation work, including “routine office expenses” from computers to coffee to company cars.

A half-decade of legal strife followed, with the Department of Revenue and Richland County suing each other over the tax. An initial audit report by the department identified $41 million in misspent dollars. The amount was later reduced to roughly $32 million.

In 2021, Richland County reached a settlement agreement with the Department of Revenue and agreed to pay $15.5 million back into the program. Under the settlement, the county did not have to pay anything to the DOR.

Despite the controversy around the tax, it is also credited with leading to the investment of more than $1 billion in the county and the creation of 1,100 new jobs thanks to projects such as the expansion of Shop Road into the Pineview Industrial Park. That project led to Mark Anthony Brewing, Cirba Solutions and China Jushi, among other manufacturers, setting up shop in the county.

The penny tax has also paid for a host of visible road improvement projects across the county, including paving 85 dirt roads, many in Lower Richland, to widening Clemson and Hardscrabble roads in the northeast to constructing the Gills Creek greenway, and a host of other projects that have been completed over the past decade or are underway.

And of the money collected by the tax, roughly 40% comes from visitors to the county, meaning the burden of paying that tax hasn’t just fallen on local residents, according to a county analysis of local spending.

The plan council approved Tuesday to create a new penny tax when the existing one expires may still not be its final iteration.

“There are a lot more processes that we have not finalized yet and we may be jumping the gun to put all of this in stone at this point,” Council chair Jesica Mackey said Tuesday.

There will be a public hearing for the penny tax plan July 9. Mackey encouraged residents to attend to share their ideas for how the money should be spent.