Letter to the Editor: Mike Murphree

I just wanted to share a letter I sent Speaker Bobby Harrell, about capping referendum to 8% of assessed value. This is an idea that could control costs in future.

Speaker Harrell,

I would like thank you for the opportunity to follow up with my question I posed during your town hall meeting with the Charleston Tea Party.

Has anyone thought about capping a referendum for a tax increase to 8% of assessed value? State Law limits counties, municipalities, and school districts to a capped debt limit of 8% of assessed value. Yet the referendum has no such cap and leaves the property owners with a limitless amount of debt to be grantee by his property.

In most real estate transactions that require a mortgage, debt to income ratios come in to play and in the commercial and some residential lending some type of down payment must be part of any loan qualifications.

What concerns me is that without a cap on referendums property owner are going to be stuck holding the bag of mountainous of debt that a vocal minority can persuade the majority to vote for.  Currently 6 to 7 times out of 10 people vote in the affirmative for positive referendum question.  It is only when a strong opposition to a spending or tax increase referendum is mounted that they have ever been defeated.

Here are some examples:

Dorchester District 2 Schools System:

• Assessed value of $435,396,679.00

• 8% available debt limit of  $34,831,734.00
• Current Debt General Obligation Bonds is $32,175,000

• Available Debt Limit of $ 2,656,734.00

• March 2004; Growth (Revenue Bond) $114,360,000.00
• March 2006; Growth (Revenue Bonds) $48,205,000.00
• Which is an Outstanding Debt of $194,740,000.00
• A referendum for 2012 for estimated $150,000,000.00 (for school construction, operating cost are to be added the future) ( Added note: if a referendum is pasted)
• Current and future Outstanding debt of $344,740,000.00
• This is 79% of your Assessed Value for Dorchester District 2 School System.

1. Assessed value for Dorchester County $488,989,453.00
2. 8% cap Total Debit Limit $39,119,156.00
3. Current GO Bonds outstanding $20,390,000.00
4. Available Debit Limit $18,729,156.00
5. Referendum for a New Jail $18,000,000.00
6. DC still falls within guideline of 8% cap with a bondable balance of $729,156.00

1. Assessed value for the City of Summerville (Less what is in Berkeley County) $140,285,609.00
2. 8% cap Total Debit Limit $11,222,242.00
3. Current GO Bonds Outstanding $7,905,000.00
4. Lease Purchase Bonds (Revenue Bond) $3,604,522.00 (which is for the parking garage that they don’t charge for)
5. City of Summerville within 8% cap with an available debt limit of $3,317,848.00 until you subtract out the Rev. Bond of $3,604,522 then you <-$286,674.00> over budget.

Dorchester County is up for reassessment in 2012 (corrected starts 2014) and all properties are subject to a new bulk appraisal for current value. What if, like Charleston County, Dorchester County loses assessed value, and then our residents, property owners, will be subject to a millage increase and a tax increase? Our General Obligation Bonds will in some cases accede our mandated 8% Caps, and possibly affect our bond ratings. When your collateralized loans or GO Bonds, Growth (revenue bonds), and Revenue Bonds are no longer backed up by equivalent asset, we could lose our bond ratings and perhaps even default on some of bonds when the public refuses to pay any more taxes.

One last bit of math:

• Total Assessed Value for Dorchester County
• $488,989,453.00
• Dorchester District 2 Schools (DC has another School District 4 which debt numbers are not available and Vocational School for which debt is unavailable also)(Added note: As of March 7, 2012 when this letter went out, but I do have additional numbers)
• GO Bonds $32,175,000.00
• 2 Growth (Rev.) Bonds $162,565,000.00
• DD2 Outstanding Debt $197,740,000.00
• City Of Summerville (without Berkeley County assessed values)(DC has other towns and cities which have debt and was unavailable at this time)
• GO Bonds $7,905,000.00
• Revenue Bond $3,604,522.00
• Summerville’s Outstanding Debt $11,509,522.00
• Dorchester County (only)
• GO Bonds $20,390,000.00
• New Jail Bonds $18,000,000.00
• Total Outstanding Debt with new jail $38,390,000.00

DD2 Schools                                  -$197,740,000.00
City of Summerville                     -$  11,509,000.00
Dorchester County                      -$   38,390,000.00
Net Assessed Value for DC         $241,349,931.00   

51% of Dorchester County Assessed Value is covered in debt.

Please note St George, Harleville, District 4 Schools, the Water & Sewer dept. debt are not included in example.

If the DD2 School Building Bond past and was added to the total debt, then 81% of Dorchester County Assessed Value would be covered in debt. Adjusted New Net Assessed Value for DC would be $91,349,931.00. (This still does not include above mentioned areas.)  

Thank you again for your time; please consider capping referendums to 8%. We must control our spending, and prioritize what is important and needed in our communities, not just what we want.

This where the letter to Harrell ends, but here is some new data:

• New data from District 4 Schools
• Total Assessed Value around $51,000,000.00 to $53,870,000.00
• 8% Available Debt Limit $4,309,600.00 to $4,080,000.00
• Current Debt General Obligation Bonds $12,006,612.00
• Over budget $7,926,612.00 to $7,697,012.00

TOTAL ASSESED VALUE FOR COUNTY   $488,989,453.00

DD2 Schools           {$197,740,000.00}

DD4 Schools                                             {$12,006,612.00}

City of Summerville             {$11,509,000.00}

Dorchester County                                 {$38,390,000.00}

Net Assessed Value for DC                 $229,343,841.00

53% of Dorchester County Assessed Value is covered in debt.

Please note St. George, Harleville, the Water and Sewer Dept. debt are not included in this updated example.

If DD2 School Building Bond passes and that debt is added to the total debt, then 84% of Dorchester County Assessed Value is covered in debt. Please understand this not intended to point fingers, but to inform you that as your Federal, and State have saddle themselves with debt. So, are we also saddled with debt at county, city, and school board level. We have some tuff choices ahead of us, and capping a referendum at 8% is a start.

Please remember pointing that finger at some group or some politician might make you feel better, but in the long run there are three fingers pointing back at you and me. Let’s fix the problem because we all come to the table with dirty hands.

Mike Murphree

Have something to say? Send a letter to the editor by emailing lindsay.street@patch.com!