Real Estate

Last year, the US resident population increased by 0.4%, or 1,256,003, to 333,287,557, according to the Census Bureau’s population estimates. The growth was felt most acutely in the South, the fastest-growing and the largest-gaining region, with totals rising 1.1%. Some states—like South Carolina—are increasingly wary of what that means and are considering steps to address it.

The Problem

South Carolina saw a net gain of 1.7% in population over the past year, earning it the third spot on the list of top 10 states by percentage growth. That continued a pattern for the Palmetto State—the population has increased 10 out of the 11 years between 2010 and 2021, only dipping between 2019 and 2020.

While population increases can mean more money for local businesses and larger tax coffers, they can also mean more expensive housing costs, congestion, and strains on existing infrastructure.

The Proposed Solution

State Senator Stephen Goldfinch (R-34) believes he has a solution—or at least a step in the right direction. Goldfinch has introduced S. 208, a measure that could require new residents to pay additional fees to drive on the state’s roads.

Goldfinch’s bill has been referred to as a “Yankee tax,” but he is quick to point out that the proposal is a fee—not a tax. And the fee would not be automatically implemented across the state. S. 208 requires individual counties to conduct a referendum to determine whether to impose one-time fees for new driver’s licenses and vehicle registration.

While the official fiscal impact is “undetermined,” the measure could raise up to $500 million over the next decade, based on estimates suggesting more than 1,000,000 extra residents are expected to pour into the Palmetto State. Under the terms of S. 208, those funds raised can only be earmarked for county infrastructure, public education, and green space conservation or preservation.

That’s not an enormous amount of money for a state with a $35 billion annual budget. But it’s a start.

Goldfinch says that long-time residents have already funded roads, bridges, and green spaces that attract new residents. He suggests that new residents who want to enjoy that quality of life should pay for the privilege of being able to take advantage of those things “on day one” that existing taxpayers have already funded.

The Details

Goldfinch believes the additional fees would begin to even the playing field for the new residents. I asked Goldfinch why he opted for a one-time fee tied to driving, as compared to, say, additional fees for new construction. It’s simple, he says. It’s easy for the consumer to calculate and, since voters approve it from county to county, individuals can have a say in what happens in their own backyards.

As currently drafted, the bill calls for referendums to question whether a $250 fee would be collected on new driver’s licenses issued to those moving to the county from another state. A separate referendum would question whether to collect an additional $250 for newly registered vehicles from out of the state.

The measure clearly targets new residents. Goldfinch doesn’t shy away from that aspect. But, he says, there’s a rational basis for asking those new residents to play catch-up with those who have already paid into the system.

Those new residents, I noted, could include military personnel. South Carolina is home to seven military bases, including Fort Jackson, U.S. Navy Hospital Beaufort, Naval Weapons Station Charleston, Shaw Air Force Base, Joint Base Charleston, Marine Corps Air Station Beaufort, and Marine Corps Recruit Depot Parris Island. Goldfinch said that he was actively working on an exemption for active-duty military personnel.

I asked about other potential exemptions, including one for seniors. Goldfinch says an exemption for seniors isn’t in the cards since older residents are a primary driver of population growth in the state.

Concerns

Goldfinch doesn’t seem worried that additional fees could slow down growth in the state—nor does he suggest that the measure is a panacea.

Dealing with change and development is an issue that counties and states struggle with across the country. How do you pay for more schools, roads, and infrastructure? And who should bear that burden? I don’t know if this fee regimen is the answer. But Goldfinch is confident that this should be a question best left to those impacted—the voters.

Status

The South Carolina Senate Finance Committee has issued a report calling the measure “Favorable.” It now heads to the Senate floor.

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