Residents question legality, fairness, spending priorities during lengthy debate
By Delayna Earley
The Island News
The Beaufort City Council voted Tuesday, May 12, to remove a proposed annual vehicle road use fee from the city’s FY2027 budget following an extended debate over legality, fairness, transparency and broader city spending priorities.
The proposed ordinance would have established a $32 annual fee on vehicles registered within Beaufort city limits to help fund roadway maintenance, street sweeping and right-of-way upkeep.
City staff estimated the fee would generate approximately $325,000 annually.
According to budget documents presented to council, city officials argued the fee would provide a dedicated funding source for roadway-related services already being funded through the city’s general budget. Staff also said generating the same amount of revenue solely through property taxes would require adding slightly more than two mills to the city’s tax rate.
City Manager Scott Marshall said the proposal was intended to create a more balanced funding structure by spreading costs more broadly among users of the city’s transportation network, including renters.
“These are ongoing obligations tied directly to the use of our transportation network,” Marshall said during the budget presentation.
The proposal quickly became one of the most heavily debated portions of Tuesday night’s nearly four-hour meeting.
Residents challenge fairness and legality
Several residents argued the proposed fee would unfairly place additional financial burdens on city residents while roads maintained by the city are heavily used by commuters, tourists and non-residents traveling through Beaufort daily.
Resident Patrick Canning said many of the roads targeted for maintenance, including Boundary Street and Carteret Street, serve large numbers of drivers who would not pay the proposed fee.
“Many drivers on major thoroughfares such as Boundary Street are simply passing through on their way to Lady’s Island and beyond,” Canning said during public comment. “They will not pay the fee, yet they use the same roads.”
Canning also argued residents were already absorbing increasing financial pressures through reassessed property values, inflation and multiple existing taxes and fees.
“Regardless of what you call it, a fee, a surcharge, an assessment, if it comes out of a resident’s pocket and goes to government, it is a tax,” Canning said.
He also raised legal concerns tied to the South Carolina Supreme Court’s 2021 Burns v. Greenville County Council decision, which struck down a similar vehicle road maintenance fee imposed by Greenville County.
“In 2021, the South Carolina Supreme Court struck down a nearly identical fee in Burns v. Greenville County Council,” Canning said. “Greenville’s $25 per vehicle road maintenance fee was ruled an illegal tax.”
Canning warned the city could expose itself to future legal challenges if Beaufort adopted a similar structure.
Other residents also questioned why Beaufort taxpayers should shoulder the cost of maintaining South Carolina Department of Transportation rights-of-way without reimbursement from the state.
“As reported in the Beaufort Gazette and Island Packet, the city manager acknowledged the city receives no reimbursement from SCDOT,” Canning said.
Several speakers additionally criticized the city for pursuing new fees while continuing to fund outside organizations and capital projects they viewed as lower priorities.
Resident Paul Trask urged council to reconsider funding tied to organizations including the Beaufort County Economic Development Corporation, South Coast Cyber Center and Digital Corridor instead of creating new fees.
“Stop funding the South Coast Cyber Center. Stop funding the Digital Corridor. And stop funding the BCEDC,” Trask said.
Resident Mike Markham also encouraged council to identify broader spending reductions before adding additional fees for residents.
“I do find it mind-boggling that you can’t tell the city manager to cut the budget by $500,000,” Markham said during public comment.
Council debates alternatives
Councilman Josh Scallate later introduced an amendment removing the proposed fee from the budget entirely.
During the discussion, Scallate said he believed additional reductions and reprioritization efforts could still be identified within the broader city budget.
“I am probably as layman as layman gets,” Scallate said during the meeting. “And I will honestly tell you that when I look at our budget presentations, I am confused most of the time.”
Scallate also argued the city should provide more itemized expenditure information publicly before final budget adoption.
“I think our residents will probably appreciate the fact that they can look at every dollar that is expended,” Scallate said.
Throughout the debate, council members and residents discussed possible alternatives to offset the projected revenue loss, including reducing consultant spending, revisiting legal expenditures, staggering police hiring connected to a proposed federal COPS grant and delaying certain capital projects.
Scallate also pointed to expenditures including Placer.ai funding, storytelling contracts and social district spending as examples of areas he believed deserved additional scrutiny.
Several speakers and council members also questioned whether the city should continue pursuing a proposed $1 million City Hall parking acquisition project while larger infrastructure priorities remain unresolved.
At the same time, Scallate acknowledged the difficulty of removing the fee without identifying replacement revenue.
“The hard part comes when you have to try to provide a solution to offset that,” Scallate said.
Councilman Neil Lipsitz similarly expressed concern about eliminating the projected revenue before identifying long-term alternatives.
“I’d like to see the tag fee reduced too, but I’d like to know where the money’s coming from before we do it,” Lipsitz said.
Ordinance withdrawn
Council ultimately approved the amendment removing the fee from the proposed FY2027 budget.
Later in the meeting, council also withdrew the ordinance that would have formally established the vehicle fee program.
City staff estimated the proposed vehicle fee would have generated approximately $325,000 annually, meaning council will now need to identify either additional spending reductions or alternative revenue sources before second reading of the FY2027 budget on June 9.
The debate reflected broader public frustration surrounding taxes, spending priorities and long-term capital planning as the city prepares for major future infrastructure expenses, including redevelopment of Henry C. Chambers Waterfront Park.
Additional budget discussions and possible amendments are expected before second reading of the FY2027 budget on June 9.
Delayna Earley, who joined The Island News in 2022, formerly worked as a photojournalist for The Island Packet/The Beaufort Gazette, as well as newspapers in Indiana and Virginia. She can be reached at delayna.theislandnews@gmail.com.