At Horry’s urging, SC may make road fees explicitly legal. How counties could benefit.
At the urging of Horry County leaders, South Carolina state lawmakers may consider changing a state law early next year that would make certain user fees, like the annual $50 road fees drivers pay here, explicitly legal, allowing counties like Horry to continue using a local funding source to fix roads.
That change could be necessary, thanks to a recent state Supreme Court ruling regarding Greenville County’s road maintenance fee, and a similar lawsuit that was filed recently in Horry County.
In both the Horry County and Greenville County cases, residents of those counties argued in the courts that road fees — a flat, annual charge on vehicles that residents pay, and that local governments use to fix roads — are unconstitutional. State law says that such fees, called user fees, have to be spent on projects that benefit the people paying.
The law already had been amended to say that the fees have to benefit the payer “differently” than the general public. The residents challenging the fees argue that since tourists and other visitors use the roads that residents pay to fix, the fees are unconstitutional.
Earlier this year, the South Carolina Supreme Court sided with those residents, and ruled a “road maintenance fee” charged to Greenville County residents unconstitutional.
Shortly after the ruling, several Horry County residents filed a similar lawsuit. That case was dropped last week, but the Greenville decision prompted officials in Aiken and Richland counties to review their road fees, and has Horry County leaders pushing for changes to state law, just in case.
In response, Horry County leaders have jumped to the defense of the county’s road fee, which raises around $17 million per year for repairing roads.
On Tuesday, a committee of County Council members, with the support of the county administration, voted to pass along a resolution that asks lawmakers to amend state law to make road fees explicitly legal, a move that will make the lawsuit easier to win. The full County Council will vote on the resolution in coming weeks and later will formally send their request for legislative changes to lawmakers.
County Council member Johnny Vaught, who met with members of the Horry County state legislative delegation on Monday, said state lawmakers in this area are willing to go along with the change.
“Informally, they seem to have high hopes for being able to get it changed,” he said.
At Tuesday’s meeting of the County Council Administration Committee, Vaught quipped that lawmakers will have to make the change. “Either that or they’re going to have to come up with a bunch of money to fix these roads,” he said.
State Rep. William Bailey (R-North Myrtle Beach), said Tuesday that he agrees state lawmakers should make the change.
“I think that when we get back into session it should be an easy fix,” Bailey said, adding that once the “very minor language tweaks” are made, it could solve a problem for dozens of counties.
If lawmakers move ahead with the change, it could save other counties from losing out on pots of local funding that they use for infrastructure and public safety projects.
Timothy Winslow, the executive director of the South Carolina Association of Counties, said his group plans to lobby lawmakers for the change, and that he’s hopeful lawmakers will amend the law sometime next year.
“Am I hopeful they’ll pass it next session? Yeah, and I think they will,” he said. “I believe it will be resolved, I think they’ll tackle it.”
What change is needed
Horry County leaders and the Association of Counties want to tweak the language that would change how the state defines the benefits residents get from local governments.
According to a 1997 law passed by the General Assembly, local governments are allowed to charge “user fees” for services, provided that the residents paying the fee receive a benefit “in some manner different from the members of the general public not paying the fee.”
For years, that law has been interpreted to mean that since residents paying a road fee drive on the roads more frequently than visitors, the benefit was sufficiently different.
But in June, thanks to a legal challenge brought by three local state lawmakers, the state Supreme Court disagreed, and said that residents using roads more frequently than visitors wasn’t a “different enough benefit.”
“Relying on this code section, the South Carolina Supreme Court ruled Greenville County’s road fee ordinance invalid as it determined that the county’s residents who pay the user fee receive the same benefit as the non-payers,” Horry County officials wrote in their resolution to lawmakers, explaining the result of the June ruling.
In response, Horry County leaders are asking state lawmakers to add that the benefit for those who pay the fee receive is different “or greater than” the benefit for those who don’t pay the fees. County leaders believe that residents being able to drive on the roads daily counts as a benefit “greater than” visitors who don’t drive on the roads as often.
Horry County leaders also suggested that state lawmakers could amend the law to state that “the general public may derive a benefit from the fee as long as the substantial benefit goes to the payer.”
Currently, Horry County is continuing to collect its road fee but is putting the money in a savings account while it has lawsuits against the fee pending. Vaught said the county is continuing to fix roads with other money in the budget, and will replace those funds once the lawsuits are done, or once the change is made in the law.
Why road fees are being challenged, and why it matters
Horry County has charged an annual fee to help fix roads since the fall of 1987. Today, that’s a $50 fee on each car a person registers to drive in the county. The money helps pay for resurfacing roads, fixing potholes and other improvements.
According to county officials, the state Supreme Court explicitly upheld their road fee in a 1992 case.
But the 1997 law change put that approval in jeopardy, which lawmakers in Greenville challenged recently, ultimately winning in June. The similar lawsuit filed against Horry County was dropped last week, but it was enough of a threat that county leaders moved to get state law amended in case of future threats.
The controversy over the road fee is also bringing attention to Horry County’s growth. The county grew by more than 80,000 residents over the past decade, 2020 U.S. Census data showed, and along with that growth has come new roads that need to be maintained. Horry County leaders have said they’re aware that they’ve got a growing need to fund infrastructure improvements, and are looking for ways to fund those projects.
”We’re building a monster empire of roads and it’s going to catch up with us one day. And with us facing the possibility of not having access to our road fund, that’s kind of concerning me,” County Council member Al Allen said recently.
The road fee lawsuits complicate matters.
Vaught argued that every South Carolina county, save for one or two with differently-worded user fees, could be affected.
“It’s going to hit every county,” he said.
Without $17 million annually for road repairs, Vaught said, the county would be forced to leave infrastructure to crumble if the state doesn’t make up the difference.
And Bailey said the state isn’t likely to do that, as every county needs more money for roads. Winslow said counties could be in a tough spot if the legislature doesn’t act next year. Bailey said he supports the change to state law in part because he doesn’t want to see tax increases to pay for local roads.
Winslow argued that even if the lawsuit against Horry County doesn’t come back, similar lawsuits are likely.
“If your road fee is struck down and you pass a budget based on that road fee, the money is going to have to come from somewhere,” he said. “We’re going to continue to get lawsuits until we get this resolved.”
This story was originally published August 25, 2021 at 5:00 AM.
