Richland County Council has approved a settlement agreement with the S.C. Department of Revenue in a long-running dispute involving the county’s Transportation Penny Tax program.
The settlement requires no payment by the county to the revenue department, but the county will invest an additional $15.5 million into Penny Tax program projects, according to a news release from the county. The agreement also stipulates that a 2017 audit of the Penny Tax program, which questioned some project spending, did not find any fraud on Richland County’s behalf.
The county froze Penny Tax spending in March 2018 on projects involving the Small Local Business Enterprise program as well as spending on two public relations firms and a mentor program after the S.C. Supreme Court agreed with the Department of Revenue that a portion of program money was spent on projects not related to transportation.
Richland County residents approved a 2012 referendum establishing the Penny Tax, designed to collect more than $1 billion from a 1% sales tax for various transportation-related projects. The county took over management of the Transportation Penny Tax program from an independent development team in November 2019.
“For the citizens, our employees and this council, it was time to put this dispute behind us and focus on delivering the Penny Tax projects approved by our citizens,” Richland County Council Chair Paul Livingston said in the release. “We have brought this program in-house, and our employees are doing an excellent job of managing the program in accordance with Department of Revenue guidelines, a fact that is acknowledged in the settlement agreement.”
The settlement, involving the county, the revenue department and the Central Midlands Regional Transit Authority, states that the county took “significant steps to ensure that its constituents have confidence” in the Penny Tax program, including reimbursing the Penny Tax Fund for certain expenditures after the 2018 high court decision. The settlement also said that county “has demonstrated a continuing commitment to fostering and maintaining and open government and being transparent to taxpayers.”
More than 250 projects have been completed since the Penny Tax Program’s inception, according to the county. The program, which began collecting sales tax in May 2013, is set to collect $1.037 billion, which will be utilized for 22 years or until the budget has been depleted to develop and maintain roads, bikeways and greenways and to fund pedestrian safety improvements.
The program has had an at-times contentious history with the state revenue department, which first alleged mismanagement of funds and illegal activity in 2015.
“After years of litigation, it is exciting to have a final resolution and be able to focus squarely on doing the work the program is charged with doing: addressing the infrastructure needs in our community,” Richland County Administrator Leonardo Brown said.