RICHLAND COUNTY, SC (WIS) - After the South Carolina Department of Revenue threatened to halt the county's future payments of penny funds, Richland County leaders are responding.
DOR first blasted Richland County's penny tax program back in December. DOR told the county it had found "multiple instances of illegal activity by individuals and/or companies" linked to the Penny Sales Tax program. Tuesday night, after about half-an-hour behind closed doors, Richland County Council members reemerged and almost unanimously approved a prideful motion.
With a vote of 9-to-1, the county vowed to take whatever action necessary, including legal action, to protect the county's embattled penny tax.
It was good news to Jim Felder, a county taxpayer who watched from the audience.
"It may need some tweaking," he said. "Yeah, no problem with that. That's in-house kind of stuff. If the Department of Revenue wants to make a recommendation on how that should be done, fine."
But, the DOR has told the county it'll stop cutting the checks to fund the penny program unless council members take measures to correct a list of problems. Primarily, DOR wants to the county to stop paying for certain administrative positions or offices associated with the penny tax program using penny funds.
The DOR said the county should fund those positions with other revenues.
"The taxpayers that voted for this penny voted for all the costs associated with it. To have to pay out of the General Fund for funds for the transportation program is, in effect, taxing people twice," said Councilman Greg Pearce.
It's the reason Pearce voted to fight DOR, even in court if that becomes necessary.
"We're going to keep trying to negotiate," he said.
Felder said he hopes DOR will cooperate. He said the state agency and its director, Rick Reames, are bullying Richland County.
"There are other counties in the state that have a penny sales tax, and they have not been bothered with any of this," said Felder.
In fact, Pearce said Richland County modeled its penny program after some of those programs. He, too, said he finds it strange that Richland County is the only county being scrutinized by DOR.
The council also passed a motion to protect its credit rating and assured creditors that bonds related to the penny will be paid.
Meanwhile, DOR responded to the county's decision.
"It is unfortunate that rather than comply with state law, Council is choosing to expend additional tax dollars to preserve a structure containing millions of dollars of potential fraud, waste and abuse," the agency wrote in a statement.
Councilman Seth Rose was the only council member who voted against the proposal to fight back against the DOR.