By Paul Gable
It now looks virtually certain that the new fiscal year, beginning July 1, 2013, will include increased taxes on the unincorporated areas of Horry County.
County council is expected to raise taxes by 3.5 mills in the unincorporated areas to fund new fire equipment and to fill some currently vacant positions.
The increase will amount to approximately $14 per $100,000 valuation on owner occupied homes, which will provide approximately $3.5 million in new revenue.
If these upgrades are not made to county fire service, council members say the county’s ISO rating will increase, especially in the rural areas, causing homeowners to pay higher fire insurance premiums.
“It’s a choice between pay a small increase to the county or a larger increase to your insurance company,” said one council member.
As the tax increase moves to finalization before June 30, the specter of larger funding problems lie ahead for the county.
Next year is a property tax reassessment year for Horry County. New property assessment values are supposed to be completed and in the county system by December 31, 2013. It is no secret that property values are down since the real estate bubble burst in 2008.
Some oceanfront condominiums have, reportedly, declined in value by as much as 70 percent. It is fully expected the overall assessed value of property in the county will decline, when the numbers are in, resulting in a decreased tax base.
Here’s where it gets interesting. In a normal reassessment, when property values are rising, reassessment must be revenue neutral, meaning counties must rollback millage rates so that collected revenue remains the same as before the new assessment, unless the county is willing to vote for a tax increase.
The same does not apply to falling property values. If the tax base declines, as a result of reassessment, there is no revenue neutral provision in the law. The county will be stuck with the decreased revenue, from current millage rates, unless council is willing to vote for a tax increase.
Will council be willing to vote for a tax increase in an election year to keep county revenue neutral? Even though individual homeowners would not be paying more actual tax, they would be paying the same amount on a home or building that is worth less in market terms.
Or will council choose not to raise taxes, but reduce county services instead?
Those are the probable choices facing Horry County next year.