Greenville City needs the penny sales tax

The city of Greenville has been growing at a rapid pace, with the population making a 22% increase from 2000 to 2018 alone, according to the US Census Bureau. But this growth has come at a cost and burden to many Greenville residents, mainly in the form of limited and insufficient transit and lagging infrastructure development.

Greenville is welcoming many new people, but at a rate that will not be sustainable long term. Some significant changes are needed. That is why the current penny sales tax being discussed is of such magnitude and importance.

Only a few months ago, Governor Henry McMaster signed the Municipal Tax Relief Act, allowing cities in counties without a sales tax to pass their own (of up to 1%), subject to voter approval. Because Greenville County does not have a sales tax imposed, the City of Greenville is now considering an ordinance that would introduce a 1% municipal sales tax for purchases made at businesses within city limits.

One major reason to support the city’s penny tax is its potential to generate an estimated $511 million in a span of eight years (from 2027 to 2035). This would spur development and help Greenville thrive as a city. In fact, 80% of the revenue from the penny tax would be allocated just towards municipal projects, much of which are or involve road and infrastructure development.

The remaining 20% of the revenue generated (around $102 million) would be directed towards property tax relief for homeowners. By using penny tax revenue to provide relief for city residents, the tax burden is shifted further toward people who have disposable income to spend on goods and services, including non-Greenville residents.

Enacting the sales tax would additionally get tourists to contribute to the city’s tax revenue. The tax would be included in whatever visitors purchase while in the city, whether it be a product or service, thereby transferring some of the tax pressure from only Greenville residents to the many non-residents who are benefitting from what the city has to offer.

The penny tax would also lessen the burden of the city’s Capital Improvement Program, also known as CIP. CIP is used to identify and finance a large variety of public infrastructure projects, but it relies almost entirely on Greenville residents for its funding. The passage of the penny tax would result in a takeover of some initiatives overseen by CIP, including road repair, sidewalks, drainage, bridge construction, etc. That way, the CIP is able to save more money and become more efficient in its operations.

The ordinance for this penny tax has gone through readings and will now be put on the November ballot for voters to decide.

For just a small amount per purchase, Greenville residents have the opportunity to raise vital funds in support of critical infrastructure projects that will have a direct effect on their quality of life and ability to travel about the city. Further, it will also shift some of the burden of keeping Greenville accessible and traversable through taxing the tourists it draws.

Hanaa Khan is a junior at Furman University, majoring in politics and international affairs. This summer, she was an intern for Greenville City Council member Tina Belge through The Riley Institute’s RISE internship program.