Conway residents will save a few dollars on their water bills in the coming months as a SC Supreme Court ruling is in Greenville County and a Horry County case is pending trial.
While Conway’s two fees are included on and paid through the city’s water bills, they do not apply to water. The two fees are $ 7.29 per month, $ 4.79 for street lights, and another $ 2.50 for sidewalks.
At the executive branch on Monday evening, Conway City Council received a briefing on the Greenville lawsuit’s ruling and decided to suspend the Conway prosecution pending settlement of the Horry County class action case.
The two charges had resulted in complaints from some Conway customers, particularly those who were already paying the Homeowner Association (HOA) fees for their streetlights and sidewalks.
Conway spokesman June Wood said sidewalk and street lamp charging is currently on hold due to a legal issue. To ensure fair treatment of Conway residents and to avoid confusion, they will not recover these charges until the Horry County case is resolved.
SC Rep Jeff Johnson, R-58, stated that all taxes must be cleared by SC legislation and it can take up to a year to resolve this situation if the city is to enforce the new fees intended as taxes. So the question is whether these two new fees are taxes or permissible fees.
Johnson says all new taxes must be approved by law by the SC General Assembly. So the question in the Greenville County case was a road maintenance fee and an upgrade to allowable fees or taxes for telecommunications services. The two Greenville charges were enacted in 2017, according to the latest Supreme Court ruling.
A Greenville judge ruled the fees were legal, but the case was challenged and the Supreme Court overturned that opinion, saying, “We find these fees to be taxes. State law prohibits local governments from collecting taxes unless they are value-based wealth taxes or have been expressly approved by the General Assembly. “
Wood said that confused some Conway residents who wondered why they would pay for sidewalks and streetlights when they weren’t in their neighborhood or in front of their homes.
The council decided to temporarily suspend the fees because it did not want to be able to return a large amount of money if the fees were not allowed.
Although Johnson said no one approached him about introducing a bill that would allow the two new fees, a lawmaker must agree to come up with a bill that would allow the SC General Assembly fees. Then it goes to a sub-committee in which public contributions are allowed. If it doesn’t get set up in a committee, it could get through the legislature next year if it is tabled by the beginning of the session.
How fast it goes through depends on how much support it has.
If all goes well, it could be next summer before it’s approved.
Johnson says he didn’t look into Conway’s problem, so he doesn’t know if he’d be willing to come up with a bill calling for the new fees.
However, he added, he doesn’t like new taxes.
“I haven’t heard from any voter whether or not this is necessary,” he said. “I just really didn’t hear anything.”
In 1992, the SC Supreme Court was debating the same issue of whether the Horry County road toll was a service or a tax.
The court voted in favor of the fee.
This Brown vs. County of Horry case is cited in the Greenville County case to determine whether a charge is a valid charge or a tax.
“According to Brown, a fee is considered a uniform service charge if (1) the income generated benefits the payer, even if the general public also benefits from it (2) the income generated is only used for the intended specific improvement (3) through the fee The revenue generated does not exceed the cost of the improvement and (4) the fee is uniformly imposed on all payers, ”the court said in its most recent ruling.
Supreme Court Justice John K. Kittredge, who agreed with this opinion, said, “Local governments want to avoid calling a tax a tax for obvious reasons. I hope that today’s decision will discourage the politically sound propensity to levy taxes under the guise of “service or user charges”. I believe today’s decision sends a clear message that the courts will not uphold taxes disguised as “service or user fees”. In the future, courts will carefully review so-called “service or usage fees” to ensure compliance with Section 6-1-300 (6). “
But Wood says Conway is simply waiting to see the Horry County lawsuit settle to make sure they get an allowable fee, and pending the outcome of that case, will decide whether to continue charging the street lamp and pavement fees .
“We want to be careful when collecting fees from anyone,” said Wood.