News Column

Credit-card processing fee proposal concerns some local officials

February 22, 2014

By Kirk Brown, Anderson Independent Mail, S.C.



Feb. 22--COLUMBIA, S.C. -- Anderson County Treasurer Jason Phillips is concerned about a legislative proposal that would prevent local governments in South Carolina from collecting processing fees for credit-card payments.

People who use credit cards to make tax payments in Anderson County now are charged $1 per transaction plus an additional 1.75 percent of the total amount, Phillips said.

In the most recent fiscal year, Phillips said, his office accepted about 50,000 credit-card payments totaling around $10 million, which accounted for 13 percent of overall collections. He said roughly 85 percent of the credit-card payments were made online, with the remainder happening at his office.

Based on the information that Phillips provided, the processing fees for last year's credit-card payments would have added up to about $225,000.

Phillips said none of that money stays in his office. He said the county uses a vendor, SC.Gov, that collects the $1 transaction charge, while the 1.75 percent fee goes to credit card companies. SC.Gov is a public-private partnership of state government and South Carolina Interactive LLC, a subsidiary of NIC Inc.

Last week, members of the South Carolina House of Representatives Ways and Means Committee approved a measure that would prohibit county and municipal governments from collecting processing fees on credit-card payments. Local governments that ignore the ban would see a reduction in state aid. At least 40 of South Carolina's 46 counties currently charge credit-card processing fees.

The proposal, which was included as part of the committee's $24 billion state spending plan for next year, had bipartisan support.

"When people are paying their taxes, you don't whack 'em again for paying by credit card and tack on another fee," said Rep. James Merrill, a Republican from Charleston.

Democratic Rep. Leon Stavrinakis of Charleston noted that the South Carolina Department of Revenue charges no processing fees for tax payments made with credit cards.

"If we can do that, the counties and local governments can do it too," he said.

Rep. B.R. Skelton, a Republican from Six Mile, tried unsuccessfully to delete the proposal from the committee's spending plan. He said the ban would cut into tax collections in Pickens County, as its 1.9 percent processing fee is paid directly to a vendor, PayPal.

Without the ability to collect processing fees, Phillips said, he would have a difficult time paying SC.Gov to handle credit-card transactions.

"We don't have a line-item budgeted for that," he said.

His office has an annual budget of about $1 million.

Phillips said he was disappointed that legislators did not consult with county treasurers about the issue.

"I hope we can sit down with them and work out a solution," he said Friday.

Control of Welcome centers may change

The state Department of Parks, Recreation and Tourism would take control of South Carolina's nine welcome centers, including the one on Interstate 85 near Fair Play, under a budget measure approved last week by a legislative committee.

Parks, recreation and tourism officials currently operate the welcome centers but their grounds are maintained by the South Carolina Department of Transportation. Rep. Merrill said the existing arrangement is not working well, which is why he proposed eliminating the transportation department's role.

Republican Rep. Chip Limehouse of Charleston objected to a portion of Merrill's proposal that would transfer $2.2 million that transportation officials spend annually on maintaining the welcome centers to the parks, recreation and tourism department.

"I think we should put DOT money into paving roads and pot holes," Limehouse said.

Merrill disagreed.

"I think we all realize $2.2 million is not even a drop in the ocean when it comes to what we need to spend on roads and bridges in the state of South Carolina," Merrill said. "I do think the welcome centers are as big of a priority right now for business in the state of South Carolina, for tourism in the state of South Carolina, for everybody that comes to the state of South Carolina as the roads themselves."

The Ways and Means Committee approved Merrill's measure on a voice vote.

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(c)2014 the Anderson Independent Mail (Anderson, S.C.)

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Source: Anderson Independent-Mail (SC)


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