Lancaster County looks to fast-track plans for a sales tax hike to help fix roads

It’s a go-big, go-fast approach to fix Lancaster County roads. It’s also a plan that puts county voters in the driver seat.

Lancaster County Council directed county staff to fast-track work that could lead to a new penny sales tax to fund road projects. Lancaster County has an 8% combined sales tax now. The proposed increase would add Lancaster to a list of Berkeley, Charleston and the Myrtle Beach portion of Horry as the only counties with a state high of 9%.

It may sound like Pennies for Progress in York County to voters, but has some key differences. One of those involves a decision needed from the state on whether Lancaster County could charge the extra penny.

“I’m in favor of the full one cent, especially if there is a targeted road projects (list) that voters can support,” said Councilman Terry Graham. “But I think before we even discuss it any more we need to know whether the attorney general is going to allow it.”

Three penny sale taxes

Lancaster County has a longstanding 1% capital project sales tax approved by referendum. The state allows a similar 1% transportation tax if voters approved it.

Until last year, counties had to pick between them. A state legislative change now allows counties to put both on ballots.

Lancaster County, though, also has a 1% local option sales tax. County attorney Ginny Merck-Dupont said that adding a penny for transportation would make Lancaster the only county in South Carolina with three locally imposed penny sales taxes (the other 9% counties have a state imposed tax).

The attorney reached out to the state attorney general’s office this week for an expedited opinion on whether Lancaster County can move forward with the transportation penny.

Councilman Allen Blackmon said the tight timeline needed to put a referendum question on a fall 2024 ballot means the county should get started now. Identifying and pricing roads doesn’t need state approval.

“If (the state attorney general) comes back and says no, we still have some pretty good ideas of what’s needed anyway,” Blackmon said. “If we hesitate... we just kick it down the road and it takes a long time to get anything done.”

The road needs list

Jeff Catoe, county public works director, presented council with the transportation tax option in January and again this summer. Without it, or something like it, Catoe said there isn’t a way to keep up with road needs.

“We have a lot of future needs already that have been identified, but (have) absolutely no funding source,” Catoe said.

The county has about 1,400 miles of publicly maintained roadway. About 900 miles belong to the South Carolina Department of Transportation. The rest belongs to the county or municipalities. From 2018 to 2024, Catoe said, existing road funding sources combine to pave about 100 miles of road.

Should Lancaster County charge a sales tax to fix roads? Voters may get to decide

Needs are most pronounced in one of the fastest growing areas in the region, the Indian Land panhandle.

“Growth effects everything,” Catoe said, “including the roadways.”

Widening of U.S. 521 or Charlotte Highway, Harrisburg Road, Henry Harris Road, and area bridge replacements in the panhandle, would cost more than $200 million, Catoe said.

That doesn’t even get below the panhandle, or to municipal roads that cost more than $650,000 a mile to upgrade. Roundabouts, a proven option to help traffic in several places already, come in at about $2 million each, Catoe said.

Like new home subdivisions that pop up regularly along the panhandle, the cost of road work continues to increase. Planning, getting right of way, approvals and construction can take years or even decades depending on the scope of road jobs. All as costs increase.

“If we had the money today we couldn’t start the project for two or three years, so you’ve got to project,” Catoe said. “You’ve got to work real hard to get your estimates on that.”

That process never begins, Catoe said, without a dedicated funding source.

A 2024 road tax vote

Pennies for Progress in York County works similar to the existing capital projects penny in Lancaster County.

The difference is Lancaster County uses that tax for municipal facilities with a smaller road component, while York County focuses entirely on roads. Pennies for Progress was the first tax of its kind when York County voters approved the first campaign in 1997.

On the same night Lancaster County Council told staff to move forward on its transportation penny Wednesday, a citizen commission met in York County to narrow the list of roads for its next referendum. Pennies 5 will go to voters on the same November 2024 general election Lancaster County now aims for with its transportation tax referendum.

Pennies began holding community meetings early this year and has been at some stage of planning for the 2024 vote for well more than a year.

Lancaster County hopes to play catch up in mere months. “It’s fast,” Catoe said. “That’s a lot of work.”

Lancaster County would use its existing transportation committee and county staff to determine road projects and costs from January to April 2024. The three-vote county council approval would have to start in May at the latest to get an approved ballot question to the voter registration office by August.

That tight timeline would give the county September and October 2024 for an education campaign on the proposal, ahead of a November vote.

How much tax for how long

Lancaster County has some choice in the new penny proposal. York County taxes a penny for seven years, then returns to voters with a new project.

Lancaster County could charge the full cent or just part of it. Voters could approve it for up to 25 years.

Blackmon said he hates the idea of three penny taxes, but likes the idea voters get to choose. “I’m only in favor of this if the voters are in favor of it,” Blackmon said.

Dennis Marstall, county administrator, said the existing capital sales tax ends in five years so it may be only a few years where buyers see all three taxes. If voters choose to extend the capital sales tax that pays for items like detention center or park space, they can. Same with the transportation penny, Marstall said.

Council members Wednesday night largely favored the 25-year proposal for the transportation penny.

Councilman Brian Carnes said the full penny amount is preferable, too, when the estimated $15 million a year it would generate is just a fraction of what the Charlotte Highway project in Indian Land alone might cost.

“If you don’t go for the whole penny, you’re basically putting all your eggs in one basket and nobody else is going to get benefit from it,” Carnes said.

There are “super projects” that will have significant costs, many of them in Indian Land, Carnes said. But there are also neighborhood roads that need paving across the county.

York County combined to put more than $1 billion of road improvements on the ground from the first four Pennies campaigns.

Not all of that money came from residents. Anyone who travels through the county to buy gas or other goods, contributes. Plus, Pennies money can be used to match federal or other funds for large projects. The state infrastructure bank alone pumped tens of millions of dollars into the area.

Carnes would expect similar options in Lancaster County.

“You got to have money to match,” Carnes said. “And if you got money to match, you’re in the front of the line. If you don’t have money, you don’t even need to be talking to them about it.”