1. Local Government in South Carolina
Lots of Government without Much Power

2. By the Numbers 46 counties ~270 municipalities (towns and cities)
84 school districts
Unknown number of special districts

3. Counties and Home Rule Before 1974—rule by county delegation
After 1974—limited home rule
Shared responsibilities and unfunded mandates
County councils
County constitutional officers: electing the probate judge, treasurer, assessor, coroner, sheriff
A special relationship: Anderson, Oconee, and Pickens
Special tax districts and double taxation

4. Municipalities (A/K/A CITIES AND TOWNS)
Great range in size from Charleston to Johnston
About 35% of South Carolinians live inside city limits
All cities required to have a clerk, most other functions (police, fire, parks, etc.) are optional
Incorporation and annexation rules
Have more home rule than counties
Zoning and land use management
City services: the Storrs-Clemson story

5. Special Districts
Created before 1974 by legislative action, to provide specific services in unincoporated areas
After 1974 county councils could create and oversee special tax districts
Bone of contention about management, and an obstacle to municipal expansion
No one knows how many, probably at least 500
Most common functions: water and sewer, fire protection, street lights, recreation

6. School Districts
Until the 1950s, there were 1200; no there are 84 through consolidation
Legislative control over structure and some functions
Different degrees of fiscal autonomy
Most boards are elected, but some are not
29 counties have a single district, others range from two to seven
Limited coordination among districts: Anderson is an exception

7. The Abbeville Case Corridor of shame
34 districts sued the state in 1993, claiming unequal funding; reduced to eight, spent 21 years bouncing between district court and supreme court
2014 decision directed legislators and plaintiff districts to work out a solution
Act 388 (2006) further exacerbated differences in districts in giving homeowners relief from taxes for school operations

8. Property tax relief
Elderly, homestead, and school operations (Act 388)
Total relief is $1.1 billion, most of it for school operations and to homeowners
Elderly first $50,000 of market value is exempt, relief is $182 million
Homeowners Part 1 is on the first $100,000 of market value for city, county and school taxes, $256 million
Homeowners Act 388 is $662 million, funded in part by a one percent sales tax hike, all goes to schools

9. How schools are funded
54 percent local, 38 percent state, 8 percent federal
$6 billion of the funding comes from the property tax
State aid of $4.1 billion includes $1.02 billion in property tax relief and $1.5 billion Education Finance Act
EFA (1977) is an equalizing formula, similar to most other states, giving relief on a per pupil bases (adjusted for special needs) with an estimated base student cost that is split on average 70% state and 30% local
Actual split depends on index of taxpaying ability; less than 30% for poor district, more for richer districts
Act 388 relief was based on house value so more of it went to richer districts, offsetting some of the equalization in EFA which has become a smaller share of total aid
Base student cost is supposed to be adjusted every year for inflation but the legislature just picks a number they think they can afford, so it is usually less than inflation-adjusted

10. Following the money: property taxes
Main source of revenue is property taxes: $9.2 billion (excluding special districts), with $5.1 billion going to counties, $8.7 billion to school districts and $2.1 billion to counties
State funds include property tax relief of $467 for , of which $249 is Act 388 (school districts only) and $218 million is for elderly and disabled (first $100,000 of market value, city, county and schools)

11. Making sense of the property tax
Classified assessment system, ratios are in constitution
Assessment is local with state oversight, rolling reassesments, and assessment caps
Mill rates are set by locals (with limits and qualifications), they look high compared to other states but only because the assessment rates are so low
Credit for local option sales tax in 29 counties
A $200,000 owner occupied house would be assessed at 4%, or $8,000, and an average mill rate of 200 would be 20% of that or $1600, minus any credits for tax relief or local sales tax
A $200,000 rental house or commercial building would be assessed at 6%, or $12,000, and get no relief except for sales tax, so the tax bill would be about three times as high

12. Other local taxes Local option sales tax (29 counties)
Local capital project tax (sunsets)
Accommodations taxes
Hospitality taxes
Business licenses

13. Issues and challenges
The role of the county delegation and limitations on home rule
Too much dependence on fees and charges
Constraints on the property tax limiting the ability of local governments to manage their finances (fiscal autonomy)
State aid to subdivisions
Constraints on city growth
City-county conflicts
Three elected entities tapping same tax base
No reliable funding sources for school construction