Creating a new source of revenue to pay for projects such as extending Dave Lyle Boulevard in Rock Hill is one goal York County Manager Jim Baker has before he resigns in January.
The road project, long-sought as a way to encourage new development and provide an east-west corridor to Lancaster County, “has potential to be of real benefit,” Baker said Wednesday, hoping to find an alternative way to pay for it.
Baker is drafting state legislation that would allow portions of state sales tax to be used for special infrastructure projects through the creation of special tax districts. He hopes to have the legislation in the hands of state lawmakers by the time he leaves York County, and said he’d offer support if needed after he leaves.
Baker, who will leave in January to take a similar job in Chesapeake, Va., has met with state Sen. Wes Hayes to discuss the plan, which could help pay for transportation projects statewide. Baker said he plans to consult with other members York County legislative delegation.
The proposal would allow for the creation of a tax district in the area of a desired infrastructure project. A portion of sales tax revenues generated there would help pay for the project.
The district would operate a lot like a TIF (tax increment finance) district, which allows local governments to subsidize development projects using a portion of property taxes collected in the district.
Baker proposes the revenue would come only from sales tax generated by new growth resulting directly from the infrastructure improvements. It would be capped at 75 percent. The remaining new sales tax revenue would go to the state, he said.
There would also be safeguards to ensure that other special-use taxes remain untouched. York County’s penny sales tax, which pays for road construction across the county, for example, would not be affected.
The extension of Dave Lyle Boulevard, widely supported by the Catawba Indian Nation and county, business and development leaders, has been on hold because efforts to pay for it have failed.
The county asked for funds from the South Carolina infrastructure bank, which provides financial support for large road construction projects across the state. The request was denied.
The infrastructure bank has previously allowed the county to use dollars from Pennies for Progress, the county’s 1-cent sales-tax road-building program, as local match for state support.
That policy has changed.
The match can still come from Pennies or Progress, but only from projects tying into the one for which state support is being requested.
Finding support
Sen. Hayes says Baker’s idea will be a tough sell because it involves allowing local governments to control how state revenues, generated from the sales tax, are spent.
That means “less money for the state to have to deal with state issues,” Hayes said.
State Rep. Gary Simrill, R-Rock Hill, said he hadn’t heard about the plan, but if it involves taking an existing tax base and finding a “creative way to utilize those funds in new areas,” allowing a portion to go to road building and infrastructure, “I see that as positive.”
Simrill said he is not interested in creating a new tax. Baker’s plan doesn’t propose any new taxes.
Many counties are in the same situation as York County, with major transportation projects in the works, but no way to pay for them, Hayes said.
That means there “may be enough pressure building” to push for a program like what Baker is proposing, Hayes said. But it must come with “a lot of safeguards” to ensure the money is being used fairly, he said.
It might be easier, though, to change the state infrastructure bank’s definition of a local match to include programs such as Pennies for Progress more broadly.
York County was the first counties to create a sales-tax road-building program in 1997. Several other counties have done the same since, taking it upon themselves to address their own transportation needs, Hayes said.
“Those Pennies (programs) should be encouraged by the state because basically the local people on their backs are improving state roads, and the state has no money to maintain them, much less improve them,” Hayes said.
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