Richland County calls for rare Friday meeting to address penny crisis

RICHLAND COUNTY, SC (WIS) - Nearly 24 hours after the state Supreme Court affirmed that the South Carolina Department of Revenue (SCDOR) does have authority to investigate Richland County's penny tax program for improper spending, the county still hasn't said anything publicly about the surprise ruling or addressed what it'll do next.

However, Richland County Council will meet in an out-of-the-ordinary Friday afternoon meeting to address what some are calling a crisis. Richland County voters approved the penny tax back in 2012.

The county has been using the tax to widen roads, build bike trails, and improve intersections across the county.

For years, SCDOR has said the county is using the penny tax for things that aren't directly related to transportation projects – things like legal fees, business cards, brochures, and even a mentor program. While the county has argued that those expenses were administrative costs related to the penny program, supreme court justices called the expenses "dubious" Wednesday when it agreed with SCDOR that penny tax spending should stop until the county cleans up its act.

"DOR has presented a compelling…case that some of the County's expenditures of Penny Tax revenues are in violation of the Transportation Act," the court wrote in a footnote.

The court also recognized that the trial court can order the repayment of any improper expenditures from the County's general fund budget. What impact the ruling could have on current road, sidewalk, and greenway projects is still unknown. Thursday, workers could still be seen at the two construction sites WIS visited.

Councilman Greg Pearce, a longtime council member, said he's almost completely in the dark on what will happen next and what the county is doing to correct the problem.

WIS reached out to county spokespersons through phone and e-mail Thursday but did not hear back. Later in the evening, a statement was released from Richland County saying in part:

Residents elected County Council to represent them and address their concerns. Therefore, it was important the County Administrator first made sure Council – not the media – was informed about the issue and that members had the opportunity to ask questions and receive information.

In the same statement, the county said the penny program is not suspended. It is examining expenses and will cooperate with the S. C. Department of Revenue. Other details were scarce.

"Silence is deafening," said Michael Letts, the leader of Richland County Citizens for Better Government. "Silence usually tells you we've got a problem, and we're trying to figure out what's the best spin to make it look like we didn't do anything wrong."

Although he declined to be interviewed when contacted by WIS, the former director of SCDOR, who was instrumental in instigating the penny tax investigation, provided WIS a short statement.

"The Supreme Court ruling confirms that SCDOR has authority over Penny Tax expenditures. Hopefully, all parties can now move forward quickly to bring positive closure to this matter," Rick Reames said.

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