TAX NEWS - June 2010

South Carolina Tax: How Richland sales tax hike must be sold

Tuesday, they find out if a once-reticent council now agrees that voters should decide the issue, which could pay for 25-years worth of improvements to roads, the bus system and pedestrian byways.

A preliminary, 10-1 vote signals that the council is receptive after stalling in 2008.

But if the issue moves forward, will promoters be able to convince voters to raise taxes in a weak economy ?

And, will they be able to depend on County Council members to work for passage of the tax?

A campaign with broad appeal could work, local public relations professionals say, focusing on street improvements to make daily driving safer and easier for everyone.

But it won't be an easy sell.

First, the effort must get the support of elected leaders, from County Council to local legislators, people willing to meet with constituents to explain the proposal.

"It has absolutely no chance of passing if you don't have that kind of buy-in," said Darrell Jackson, a state senator who owns a public-relations firm, Sunrise Communications. "And if you have elected officials, on the other end of the spectrum, saying it is ill-advised and the timing is wrong, it will definitely fail."

Public relations chief Bob McAlister agreed.

"If individual members of County Council are not willing to go out there, stick their necks on the line, put their reputations on the line for these projects, the people will reject it."

Promoters are going to have to figure out how to target the message to people in each part of the county; assure voters the county will do the specific projects County Council has identified; and let people know when construction will start, marketing executives said.

Ike McLeese, director of the Greater Columbia Chamber of Commerce, said one tactic in the education campaign may be putting up signs along roads where the tax money would be used to make improvements.

"There is a story to be told, and it's a very different story for different individuals, and you have to bring it down almost door-to-door," McLeese said. "It's got to be a very personal presentation as to what's in it for you."

Forming a campaign organization and budget would be premature before County Council decides whether to put the issue on the ballot, said Rick Silver, with Chernoff Newman, the firm that promotes the bus system's Central Midlands Regional Transit Authority.

But the campaign is sure to pull in members of the chamber of commerce, environmental groups, the United Way, neighborhood organizations and bus riders. They will need to raise at least $250,000 in private money for a campaign, said McAlister, who worked on a similar effort in Florence County.

The campaign will focus on educating people about the list of council-approved projects that would guide expenditure of the proceeds — an estimated $1 billion over 25 years.

The project list that comes before County Council on Tuesday is the same one developed by a citizen's group two years ago, with updated numbers.

Most of the money, 61 percent, would be used for road improvements, with 6 percent going to sidewalks, bike lanes and trails.

But it's the need to find new funding for bus service that is pushing the referendum now. Thirty-three percent of the money would go for public transportation. And even with more than two-thirds of the money tagged for road improvements, McAlister said funding the bus system will be troublesome for voters who don't use the service.

"So the question will be: Will the community as a whole look at that pressing need and conclude that, even though it doesn't affect me, for the betterment of the whole community, I will vote to raise my tax?" said McAlister, with McAlister Communications.

"What you're asking the voters to be is charitable," he said. "And in this day and time, and in this economy, when so many people don't have jobs, charity begins at their homes. That's a big problem."

So far, chamber representatives have focused their message on the need to keep the buses running so workers can get to their jobs at hospitals, restaurants and stores.

But Carolyn Sawyer, with the Tom Sawyer Co., said that message should broaden to include the need to attract new businesses. A better transportation system, including better bus service, would make Columbia more competitive when businesses look to relocate or expand, she said.

"The tax base comes from creation of new jobs, industry that pays new taxes, people who pay taxes," Sawyer said. "Anybody you talk to — left, right, center — who's going to argue with that?"

McLeese said he hopes the chamber will foot the bill for an economic impact study to measure how many jobs passage of the referendum would produce through construction and the purchase of goods and services.

Now, the sales tax in Richland County is 7-cents on the dollar, so the tax on purchases would increase to 8 cents, if voters were to approve. People eating in restaurants pay extra, so their sales tax would go to 10-cents on the dollar — one of the highest rates in South Carolina.

The campaign needs to compare the direct cost with the long-term benefits, said Kelly Davis, who worked on a 2008 school-funding initiative that passed in Richland School District 2. And while voters are leery of "scare tactics," it's important to make clear the consequences of not passing the tax, she said.

"You really have to start out with a strong message that helps voters understand how the money's going to be used, and how it impacts them on a day-to-day basis," said Davis, with Davis Public Relations.

"When you think about going to moms and saying, 'Look at safety issues on the road,' that's a message that I think appeals to women."

Heyward Bannister, with BANCO/Bannister Co., agreed that educating voters is the key.

"You have to be real with people," he said. "Some people may not buy into it, but it's about the benefits."