Cities worry that they may lose millions of dollars from business licenses
March 7, 2017
By Kirk Brown and Eric Connor, Anderson
Proposed legislation could costs cities and towns in Anderson and Greenville counties nearly $10 million in revenue from business licenses
Officials with cities and towns throughout the Upstate say legislation dealing with business licenses could create financial burdens and strain essential services.
The bill in the South Carolina House of Representatives may affect cities such as Greenville, Greer and Anderson, as well as small towns such as Honea Path, where the mayor worries that a loss of revenue could lead to cuts in the police force.
Greenville could see a loss of $5.7 million as a result of the measure.
"This bill is like aiming a torpedo directly at the city of Greenville," said Mayor Knox White, adding that the proposal "has the potential to totally disrupt everything we are doing."
The same measure could trim business license revenue by $1.9 million in the city of Greer and $1.5 million in the city of Anderson, officials said Thursday. The losses would total at least $856,000 combined in Belton, Clemson, Easley, Honea Path, Iva, Pelzer, Pendleton, Starr, West Pelzer and Williamston, according to Scott Slatton, a legislative and public policy advocate with the Municipal Association of South Carolina.
The revenue losses stem from exemptions for insurance companies and other businesses under a bill proposed by Rep. Bill Sandifer. A Republican from Seneca, Sandifer is chairman of the House Labor, Commerce and Industry Committee.
Sandifer said Thursday that he wants to make the process of obtaining municipal business licenses less complicated and more fair. Under the current system, he said, some businesses have to obtain licenses from dozens of cities that have different rules. He also the cost of these licenses is based on an economic factors that are "grossly unfair" to businesses.
"We are not out to harm the municipalities at all," said Sandifer, whose committee passed his bill last week.
The measure, which is waiting to be debated on the House floor, has 13 co-sponsors, including Reps. Eric Bedingfield and Dan Hamilton, who are Republicans from Greenville County, and Brian White, a Republican from Anderson.
Sandifer said he is "sitting on the bill" in hopes of striking a compromise that would satisfy groups such as the Municipal Association and South Carolina Chamber of Commerce. But he also complained that the Municipal Association has not shown a willingness to negotiate in "good faith."
Municipal Association officials said Thursday that they support efforts to standardize and streamline the process for issuing business licenses, but they are concerned about the "Christmas tree of exemptions" in Sandifer's bill.
Ted Pitts, chief executive officer of the state chamber of commerce, said in an interview last month that his group is looking to cut the red tape that makes obtaining business licenses a "cumbersome process."
"Though we would love to pay less in taxes or business licensing, we are not calling for a big tax cut through this," Pitts said. "We just want to standardize the process."
To make up for lost revenue that would result from Sandifer's bill, Greer would have to raise its business license fees by 167 percent, said David Seifert, the city's finance director.
The projected $1.5 million loss in Anderson would account for 6 percent of the city's general fund budget.
"That is a lot of money," city Councilman Matt Harbin said, and would create a significant strain on city services.
Harbin also is president of the Anderson County Municipal Association. He said Sandifer's bill is causing concern in towns and cities throughout the county.
"It is something we take very seriously," he said.
Honea Path Mayor Earl Lollis Meyers said business licenses are an important part of his town's budget. Any significant loss of revenue from these licenses would likely lead to cuts at the town's police department, he said.
"I wish they would keep their hands out of our business," Meyers said.
Ron Barnett of the Greenville News contributed to this report.
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