The Municipal Association of South Carolina through the Decades
The World’s Fair offered people a glimpse into the world of tomorrow by showcasing its vision of the future. Americans, unable to forget the Great Depression, made conservatism and cooperation the general rule. A small group of local elected officials realized they had to pool their knowledge to meet the challenges of the changing times, and the Municipal Association of SC officially organized. During the 1940s, the Association’s sole mission was lobbying at the State House for municipal governments. Local officials’ top issues were access to alternative sources of revenue, high insurance rates and taxes. Association members studied the possibility of establishing funds for self-insurance and pursued a fair tax on liquor, beer and wine to relieve the burden on the property tax.
Cities in South Carolina began the 1950s recovering from the long war effort. The Municipal Association was proving its value by advocating successfully for legislation to allow municipalities to share in the motor transport fee and a larger share of the beer, wine and liquor tax. Mayor Morrison of Charleston challenged local leaders to recognize that industry was looking at the South and “we must grab this pace of industry by the forelock!” Other issues were modernizing annexation laws, encouraging regional planning, obtaining social security and state retirement for municipal employees, and passing planning enabling legislation.
With 100 percent of the 235 cities and towns as members, the Municipal Association was one of the few statewide associations with a full-time staff including an executive director, assistant director, legislative counsel and three clerks. The Association began publishing its first news magazine, “South Carolina City” and also offered services such as collecting delinquent taxes from insurance companies and offering municipal employees group life insurance. Delegates from South Carolina were active in the American Municipal Association (the predecessor to the National League of Cities) and the US Conference of Mayors.
The decade of the 60s began on a sad note. Jim Caldwell, Sr., the first executive director of the Association hired in December 1939, died on August 4, 1960, after a brief illness. “Mr. Jim” as he was called, served for 21 years and built a strong organization well respected by the member cities and the legislature. His son, Jim Caldwell, Jr., who had served as the deputy executive director, was promoted to executive director. In 1962, the Association moved from its first home at USC to the Columbia Building (Number One Main) directly across from the State House.
Legislative approval of significant changes in annexation laws dealing with the definition of freeholders, permanent funding for the USC Bureau of Research and Services, and creation of a state planning agency within the State Development Board were touted as legislative successes. The Association began offering its Trade Certification Program in 1965. Representatives of the mechanical trades requested the Association administer a single test to those applying for building permits in member cities. Prior to this, each city administered its own test.
The 1968 formation of the South Carolina Association of Counties brought more support for local government to the State House. Research, information, publications and training were the top goals for the Association, which continued to have 100 percent membership with 257 cities and towns as members.
Home Rule and federal revenue sharing legislation began a busy decade for municipal government in South Carolina.
In 1973, the Association worked with other groups interested in responsive local government to push for the Home Rule amendments to Article VIII of the state constitution. Simultaneously, the Association supported the Nixon administration in its push for general revenue sharing. Passed in 1972, Nixon’s federal revenue sharing sent billions of unencumbered dollars for cities to use in meeting the growing demands of their citizens.
Governor John West addressed the delegates at the Annual Meeting in 1972 and bragged that South Carolina was the first state to submit a plan under the new Emergency Employment Fund. The Fund was a federal stimulus plan for the early 70s that required the state, counties and cities to agree on how to split the money. Governor West reported, “We have a spirit of teamwork and cooperation that is unequaled in any other state in the nation.”
After the Home Rule Act became law, the Municipal Association actively promoted legislation to implement Home Rule. Better annexation laws and more fiscal autonomy were left out of Home Rule legislation because of opposition from utilities and business groups.
Executive Director Jim Caldwell Jr. resigned in December 1973, and J. McDonald Wray became the Association’s third executive director in January 1974. In November, the Association moved to new offices in the Standard Federal building on Lady Street.
Fighting against double taxation and fighting for alternate revenue sources became part of the Association’s legislative agenda.
While the 70s were times of expanding the role of government, the 1980s were times of making local government more self-sufficient. The Municipal Association changed its efforts from helping implement Home Rule to working with the Advisory Commission on Intergovernmental Relations to find alternative sources of revenue for municipal government.
With implementation of the Reassessment Act of 1975 beginning in the early 1980s, homeowners were shocked as their property appeared on the tax rolls at fair market value. Prior to the 1975 Act, the 4 percent home value only changed after a sale. If a resident stayed in his home, the value never went up.
The Federal General Revenue Sharing Act of 1972, which had sent $85 billion to state and local governments, was repealed in 1986. Government leaders forecasted the need for other sources of revenue to reduce the burden on the homeowner.
The Association supported a series of legislative bills to broaden revenue options for municipalities. In 1984, the General Assembly passed a statewide accommodations tax and added tax increment financing as a tool for economic development. Negotiations began on a local option sales tax to give an additional source of revenue for local government and reduce property taxes. The legislation stalled in conference committee as the decade ended.
The first significant annexation law changes in 25 years passed in 1988. The 25 percent petition and election method became state law.
Cities and towns in South Carolina learned the benefit of collaborating under the umbrella of the Municipal Association. Pooled insurance programs through the Local Government Assurance Group (health) and the South Carolina Municipal Insurance Trust (workers compensation) gave municipalities more direct control over their insurance needs. Legislators amended the Setoff Debt Collection Act to allow municipal government participation.
The Association used technology pioneered by South Carolina ETV to broadcast by statewide closed circuit television a series on “Leadership in the 80s.” The Association started the Municipal Elected Officials Institute of Government in 1986 and the Achievement Awards program one year later.
In 1985, the Association signed a memorandum of agreement with the South Carolina Association of Municipal Power Systems to provide staff support, making it the first formal affiliate of the Municipal Association.
In 1981, MASC moved from 1213 Lady Street to a building purchased by the Association located at 1529 Washington Street.
The 90’s began with unfinished business. The Local Option Sales Tax legislation, a priority for the Association and the Advisory Commission on Intergovernmental Relations, was stuck in a conference committee as the 1989 session ended. Early in the 1990 session, the General Assembly passed the legislation, and Governor Carroll Campbell signed it into law. The Association led the campaign as all 46 counties voted on the LOST in the 1990 November elections. Six counties passed the referendum and began collecting a penny sales tax for property tax reduction and a new revenue source for local government.
The 1992 elections saw the Republican Party gain control of the House of Representatives for the first time in modern history. The new majority had run on the promise of repealing the property tax. Debate over the fiscal authority of local government under Home Rule continued until the passage of the Local Government Fiscal Authority Act of 1997. Although the Act restricted local government from new taxes without expressed approval of the legislature, it also established the local hospitality tax, the local accommodations tax and the capital project local option sales tax.
The Comprehensive Planning Act, passed in 1994, consolidated several previous legislative acts dealing with planning into one unified act for cities and counties. Local governments had until 2000 to meet the Act’s requirements.
The 1996 federal legislation deregulating the telecommunication industry led to a consolidated effort by the telecommunication industry in South Carolina to prevent municipal control over expanding use of the right of way. The Telecommunication Act of 1999 changed the revenue source from the traditional franchise on companies using the public right-of-way to a business license tax on all retail communications.
The Association continued the concept of pooled risk to control insurance cost and service by forming the South Carolina Municipal Insurance and Risk Financing Fund in 1990. SCMIRF joined the Association’s two other insurance pools to offer complete insurance protection for municipalities.
The Association transitioned to its fourth executive director in November 1992. Howard Duvall, director of intergovernmental relations, became executive director upon the retirement of Don Wray.
Following on the success of the Set Off Debt Collection Program, the Association expanded its collection programs in 1992 with the Insurance Tax Collection Program. In 1998, the Association added the Telecommunications Tax Collection Program. These programs proved an effective way for cities and towns to work together under the Association to more efficiently collect these taxes.
The growth of the Association’s staff to support all of these new services led the board of directors to authorize a search for a larger building. The Association and two of the insurance pools, South Carolina Municipal Insurance Trust and South Carolina Municipal Insurance Risk and Financing Fund formed Gervais Street Associates to build a new facility. The Association moved into 1411 Gervais in November 1999.
The Municipal Association began the new century in its new headquarters at 1411 Gervais Street in Columbia. Neither Y2K bugs nor a January snow could dampen the enthusiasm as the grand opening celebration was held on January 25, 2000. Municipal officials were pleased with the new presence on Gervais Street across from the State House.
The first year of the century also saw the first major change in annexation laws since 1988. The petition and election method was changed to comply with federal court decisions and reinstated as an annexation alternative. Other tools for the municipal toolbox followed with amendments to the Municipal Improvement Districts Act (2000) to allow for business improvement districts, Textile Community Revitalization Act (2004), and the Retail Facilities Revitalization Act (2005).
Debate over private property rights versus protecting the public through good land use planning consumed several legislative sessions. The debate subsided after enactment of the Vested Rights Act (2003) which protects developers and requires training and certification of those involved in land use planning. This legislation was complemented by the Priority Investment Act (2007) which requires notification and coordination of government actions affecting land use decisions.
Taxes continue to be a constant source for public policy debate. The decade started with a reduction in the assessment rate for automobiles from 10.5 percent to 6 percent. The rate declined ¾ percent each year from 2001 to 2008. Local property taxes continued to be the target of the state legislature. Hard caps on millage increases by local elected officials, a sales tax to replace school operating millage and caps on increases in appraised value of property were some of the disastrous results of Act 388 of 2006. Constitutional amendments to change property tax laws were approved by the voters in spite of the Association saying, “this isn’t the deal you think it is!” The chickens came home to roost with a steep decline in state revenue, which left schools underfunded and local governments searching for ways to provide essential services with legislative caps in place.
The Municipal Association stepped up to inform cities and towns about GASB 34 closely followed by GASB 45. Both pronouncements of the Governmental Accounting Standards Board were costly for local governments. The Association established the South Carolina Other Retirement Benefits Employee Trust to help local governments meet the requirements of GASB 45.
Technology Enhanced City Hall was launched in 2001 to help cities and towns use new technology to improve services and access to city hall. The Association selected VC3, a Columbia based technology firm, as its strategic partner to provide members state-of-the-art technology at affordable prices.
The Municipal Association umbrella for affiliate associations spread wider as the South Carolina Association of Stormwater Managers (2001), Municipal Technology Association of SC (2004) and Municipal Court Administration Association of SC (2006) formed bringing the total number of affiliate associations to 10.
In 2008, the board promoted veteran Association employee, Miriam Hair, to the position of executive director upon the retirement of Howard Duvall. Hair became the fifth executive director of the Municipal Association.