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Growth Impact Action Committee:

Horry County and South Carolina

Growth Impact Action Committee Roadmap
How to be Effective 9/12/08
What Now on Growth's Fiscal Impact  9/11/08
Horry County PRIDE
Envision 2025 Comp Plan 10/9/07
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What Now on Growth’s Fiscal Impact

   -- George Edwards

 

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What to Do

Growth's Public School Fiscal

  Impacts -- All Important

Studies and Models of Growth's  

  Fiscal Impact

Economic Studies

Links to Detailed Discussions 

  and Statute Texts  

Councilperson's Votes/Records  

   on Growth's Fiscal Impacts

 

 

 

What to Do

  • Vote for only those Horry County council people who insist that the proportionate share of the costs of the public facilities, including public schools, required by new developments are paid by the new developments that require them, rather than the rest of us.

  • Press for close cooperation between the Horry County council and the Horry County board of education.

  • Press for cooperation between Horry County, the BB&T Center for Economic and Community Development and others to arrive at mutually agreed fiscal impact estimates.

  • Choose not to vote approval of new school bonds or taxes of any kind for public school construction or expansion that supports new development unless there are agreements in place so that the development will pay for its proportionate share of the public school facilities it requires. *

  • Press for the S.C. General Assembly to have it include public school facilities in the impact fee statute. But as it has ignored all previous pleas to change the statute, Horry County voters should focus their efforts on what Horry County government can do within current S.C. law.

*International Paper, for instance, might have a hard time finding buyers for its huge Carolina Station development, if they find their children will be bused to Aynor for a second shift of classes. If, instead, International Paper decides to be agreeable to putting Carolina Station buyers into a residential improvement special tax district in which they will pay additional taxes for the school facilities they require and the school system agrees, Horry County council would find it difficult not to pass the necessary ordinance allowing it.

 

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Growth's Public School Fiscal Impacts -- All Important

 

The additional public school costs of a new development outweigh any other Horry County property tax costs. The S.C. impact fee statute precludes use of impact fees, under any name, for any public facility not listed. It does not list public schools. As a matter of fairness, there is no logical reason for this exclusion. In South Carolina the only apparent way to have developments pay for the public school facilities they require is by putting them in special tax districts. The original developing landowners must agree to this.

 

The Residential Improvement District Act specifically allows inclusion of public school facilities in a special tax district set up in accordance with that act. It is currently unclear whether a developer can enter into a legally enforceable agreement with a local government to pay for public school facilities other than with a residential improvement act ordinance. An attorney general opinion on this is being sought.

 

The original developing owners can obligate subsequent owners to pay the special taxes the original owner agrees to, including those to cover the costs of the public school facilities they require under the Residential Improvement District Act.

 

Unfortunately, the only S.C. statute that currently provides for a new development’s payment of the added operational costs it requires is the Public Works Improvement Act. That act allows inclusion of the additional operational costs to a local government in special taxes from a public works improvement special tax district. But public school costs of any kind can not be included in the special taxes collected in a public works improvement special tax district in the opinion of at least two attorneys..

 

Both county and school system operational costs from a new development continue year after year while public facility construction costs end after the bonds for them are paid, typically after 20 years. The net public school operational costs that Horry County will have to pay directly are unclear because there is yet no history to base the return to Horry County from the newly passed 1% sales tax to cover public school operational costs.

 

Even when S.C. statutes allow a new development to pay its proportionate share of public school costs, any S.C. special tax district agreement requires an ordinance passed by the local government, such as the Horry County council, to approve agreements with developers. A school system can not pass such.

 

The school system would need to provide the estimates as to what a new development requires as to the number of new schools or students that the new development requires and provide assistance in negotiating the agreement with the developer on such as when or what event would trigger school expansion or new school construction bonds.

 

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Studies and Models of Growth's Fiscal Impact

 

The fiscal impact to Horry County and its taxpayers is overwhelmed by the fiscal impact to the Horry County school system. Yet the Horry County fiscal impact model does not consider the fiscal impact due to schools, nor did the fiscal impact component of the International Paper study for Carolina Station done by the BB&T Center for Economic and Community Development.

 

Nevertheless, the Horry County model conclusions on the fiscal impact to Horry County, excepting schools, was in sharp disagreement with the study provided by the BB&T Center for Economic and Community Development for International Paper when applied to Carolina Station. The major apparent reason was that the International Paper study used a much lesser county fiscal costs per person when calculating Carolina Station’s costs than the county model.

 

The county model determines the cost per person by dividing the costs by the number of people in the county. The International Paper study divided the costs by the number of people in the county plus its estimate of the full-time equivalent number of tourists. The latter method times the estimated number of people in Carolina Station alone would yield a significantly lower estimated cost for Carolina Station.

 

There are other differences in the assumptions and considerations between the model and the study. It is highly desirable that those be clearly delineated and, if possible, mutually agreed methods arrived at so that the model’s and the study’s future fiscal impact estimates agree.

 

Both the International Paper study and the county fiscal impact model considered that the county average of 38.6% non-owner occupied homes (that yield at least half again the taxes [6% compared to 4% -- not including other tax relief]) in computing the property taxes for Carolina Station that is ten miles from the ocean. In the future, percentages used should reflect the percentages experienced in the neighborhood of a proposed development's location.

 

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Economic Studies

 

 There is no question that the construction industries and those associated with it will receive economic benefits during the construction phase of new developments. It is not clear whether the rest of us will. Overall economic activity will increase after the construction phase in the same fashion that simply adding adjoining areas to Horry County would. But it is not clear that there will be increased economic benefits to existing taxpayers, although there will clearly be increased fiscal county and school operational costs as well as environmental costs.

 

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Links to Detailed Discussions and Statute Texts 

 

With further information, thinking has evolved since this Web site began in early 2002 so some of the earlier comments are outdated. But the background details below help broaden the picture. Click the following tabulated links as you see fit.

 

Carolina Station 8/11/08
Getting Developments to Pay for their Public School Needs 6/23/08
S.C. Residential Improvement District Act 6/7/08 (Statute text)
Residential Improvement District Bill with Comments 6/6/08
Methods to Make Developments Pay for Themselves 6/6/08
Public Works Districts and Putting it all Together 6/6/08
County Public Works Improvement Act (Statute text)
Growth Management Tools 6/6/08
Impact Fees 3/13/08 (Items back to 10/4/04)
S.C. Development Impact Fee Act  (Statute text -- scroll down to 6-1-910 to view)
Horry County Tischler Software 12/1/07

 

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Horry County Councilperson's Key Votes and Records on Growth's Fiscal Impacts

Carolina Station Third and Final Reading Votes

The county majority voted against deferral and for the development agreement as it stood even after appeals by school system officials for a 60 day deferral of the Carolina Station development agreement. They asked for this to allow further school system renegotiation with International Paper in light of the just previous month's passage of the Residential Improvement District Act that for the first time made explicit provision for developments to pay for the public school facilities they would require. As at second reading, development approval was on the agenda to be voted on before development agreement approval.  The following tabulates the votes made by those not prevailing on the motions:

For deferral for 60 days: Ryan, Schwartzkopf, Worley, Gilland
Against Carolina Station development approval: Ryan, Schwartzkopf, Worley, Barnard
Against development agreement approval: Ryan, Schwartzkopf, Worley; Barnard, Gilland

Six votes were required for or against passage of the various motions (Schulz had to recuse himself because he is a partner in DDC Engineering, the firm representing the developer, International Paper Realty). Surprisingly, Foxworth voted with the prevailing side on all these votes although he has maintained ever since being elected to the council that he was for developments paying their own way. His vote would have defeated acceptance of the development agreement, but as the development itself would have previously been accepted, in accordance with the agenda order,  with or without his vote, no apparent incentive remained for International Paper to agree to anything.

For more details, click Carolina Station and read the "Carolina Station July 1 Third Reading and International Paper Study" section.

2008 Impact Fee Votes

The following tabulates 2008 votes on impact fees:

February 5

Establish provisions for impact fees - Against: Prince, Grabowski, Schulz, Frazier

Absent: Hardee

February 19 Defer impact fees until workshop - Against: Ryan
March 4

Allocate $101,000 for contract with TischlerBise for an impact fee study

- Against: Prince, Schulz, Frazier, Hardee; Absent: Grabowski

April 22 Put impact fees on hold until Assessable Transfer of Interest (ATI) issue resolved in the general assembly -- Passed unanimously

In summary seven of the twelve 2008 council members had voted their support for establishing provisions for impact fees until the ATI issue arose: Ryan, Schwartzkopf, Worley; Barnard, Gilland, Foxworth and Allen.

Overall Records

Overall on their records as to developments paying their own way, at least as to county fiscal costs not including schools:

Chairman: Liz Gilland -- has consistently supported impact fees and voted against the Carolina

                                     Station development agreement, although she voted  for the development

District 1: Harold Worley -- has consistently supported impact fees and voted against Carolina

                                           Station and its development agreement

District 2: Brent Schulz -- has shown no support for developments paying their own way

District 3: Marion Foxworth -- until his approval of Carolina Station, in which International Paper

                                               said they would not agree to putting that development into a         

                                               special tax district, had consistently stated his support for

                                               developments paying their own way and voted accordingly

District 4: Mike Ryan -- has been a consistent and most ardent supporter of impact fees

District 5: Howard Barnard -- although he has been tepid in his statements regarding impact fees,

                                              he supported the 2008 motions to establish provisions for impact

                                              fees and voted against the Carolina Station and its development    

                                              agreement in which its developing landowner, International Paper,

                                              refused to consider putting Carolina Station into a special tax

                                             district that could have had it pay its own ways as to public schools

District 6: Bob Grabowski -- has never voted for any measure in which developments might pay

                                             some portion of their own way although he has said he favored

                                             $500 impact fees despite being a member of the Homebuilder's

                                             Association and that his company, Myrtle Beach Lighting, profits

                                             significantly from development.

District 7: James Frazier -- has never voted for or supported any effort to have developments pay

                                         their own way

District 8: Carl Schwartzkopf -- has consistently voted for developments paying their own way

District 9: Paul Prince -- a consistent opponent of impact fees or any attempt to have

                                     developments pay their own way

District 10: Kevin Hardee -- has never voted for or supported any effort to have developments

                                            pay their own way

District 11: Al Allen -- voted for establishing 2008 provisions for impact fees, but voted for    

                                  Carolina Station and its development agreement. He is one of the most

                                  recent members of the county council

Gene Smith, former District 6 councilman. was a strong proponent of impact fees who always voted accordingly as has Mike Ryan, current District 4 councilman. Smith never ran for re-election and Ryan was defeated in this year's primary election.

 

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