Angus v. City of Myrtle Beach

Justice PLEICONES

dissenting:

I respectfully dissent. I agree that Myrtle Beach erred in relying upon non-statutory factors in computing the GO rollback millage. I would find, however, that Angus has shown no prejudice and would therefore affirm the circuit court’s order denying her relief.

At the time Myrtle Beach was calculating its 1999-2000 GO millage rate in June 1999, it was required to estimate the prior year’s property tax revenues since final figures are not provided to it by the county auditor until August. The city estimated its prior year’s revenue by applying an 86% “collection rate” to the overall amount billed. Further, while Myrtle Beach had available the new assessment values, the appeals process whereby property owners may seek a reduction in valuation was not yet complete.

The use of non-statutory variables violated S.C.Code Ann. § 12-31-251(E) (2000). The reality of municipal budgeting is that it is an inexact science, relying as it must upon estimates and “best guesses.” As this Court recognized in Simkins v. City of Spartanburg, 269 S.C. 243, 237 S.E.2d 69 (1977), municipalities must rely upon imperfect and incomplete calendar year figures to meet their obligation to enact a fiscal year budget. Simkins held that a city “can proceed on the basis of past experience and the best available estimate of revenue. ...” Id. at 249, 237 S.E.2d at 72; see also County of Lee v. Stevens, 277 S.C. 421, 289 S.E.2d 155 (1982) (“It is a fact of life not all property taxes are ever collected”).

Although Myrtle Beach erred in relying on the nonstatutory variables, Angus has not shown prejudice. First, she does not challenge the circuit court’s finding that Myrtle Beach could lawfully have levied a total of 65 mills in 1999-2000, but levied only 61. Further, Angus does not challenge the circuit court’s calculation showing that Myrtle Beach’s GO millage for 1999-2000 exceeded that permitted by § 12-37-251(E) by approximately 4.44 mills. When the city learned it had overcollected *7taxes for 1999-2000, it reduced the following year’s millage by 2.3 mills. As the Court said in Lee County, “If in the last analysis during some particular year there is a modest surplus or a modest deficit, no serious harm will come. Adjustments can be made the ensuing year.” Id. at 427, 289 S.E.2d at 158. Myrtle Beach made such an adjustment.

I would hold that while Myrtle Beach erred in calculating the GO rollback millage, this error was within the latitude afforded taxing entities that must rely on incomplete figures when calculating millage rates.6 Simkins, supra; Lee County, supra. Further, I recognize that in calculating this rollback millage, Myrtle Beach relied upon the advice provided by the Department of Revenue to all municipalities located in counties that had undergone a reassessment.7 The effect of the majority’s decision today is to subject these municipalities to refund litigation over relatively nominal sums. Such a result is not required by our precedents, and imposes an unnecessary fiscal burden on our cities and their current taxpayers. I would affirm the order of the circuit court.

BURNETT, J., concurs.

. A taxpayer, whose property tax bill was too high because a city or county made a minor error in calculating the millage rate in reliance upon advice from the Department of Revenue, is in a different position from a taxpayer who has been required to pay a disproportionate share of property taxes as the result of the taxing entity’s adoption of a patently unlawful ordinance. Thus, Angus and others affected by Myrtle Beach’s good faith efforts to set the appropriate millage are not in the same position as Charleston County taxpayers who were unlawfully taxed pursuant to an ordinance capping valuation increases for owner-occupied residences at 15% while placing no cap on non-owner occupied property. These taxpayers were entitled to a refund. See Riverwoods, LLC v. County of Charleston, 349 S.C. 378, 563 S.E.2d 651 (2002). The difference between the taxing decision made by Myrtle Beach and that made by Charleston County is more than a matter of degree: Charleston created two classes of taxpayers, in order to lighten the tax burden on one group by shifting it to the other. Further, the impact of the Charleston Ordinance on owners of non-capped property could not be characterized as "modest.”

. Countywide reassessments and equalizations of real property are conducted every fifth year. S.C.Code Ann. § 12-43-217 (2000). Municipalities and other taxing entities within a county use the county’s property valuations.