Legislators endorse Penny: Seasoned lawmakers say now is time to leverage influence in Columbia for matching state funds

Two seasoned state legislators from Sumter are publicly endorsing and encouraging a yes-vote on a ballot referendum voters will decide on this November that is poised to collect $125 million for capital improvement projects countywide.

If approved, a temporary 1% sales tax will be added to goods in Sumter County, though items like groceries, gasoline and prescriptions are exempt, and those "pennies" on each bill will be used to fund 30 projects over the next eight years. Projects - developed as an all-or-nothing list by a committee and approved to be placed on the ballot by Sumter County Council - span roads and infrastructure, public safety, economic development and quality of life.

S.C. House of Representatives Speaker Murrell Smith (R-Sumter) said he is planning to vote yes for the Penny for Progress initiative because of the way such a sales tax is structured. Rather than raising property taxes, which would only impact residents, a penny sales tax collects money from visitors to Sumter as well.

"It's an investment in Sumter's future that allows us to continue growing as a community while ensuring we have the resources needed to maintain and upgrade the services we rely on every day," Smith said. "Simply put, every community needs to invest in itself. This is our chance to do so."

Calculations from the Penny for Progress campaign, which is being led for the first time by SumterEDGE, Sumter's economic development agency, show a third of the sales tax collected will be from non-residents. Sumter locals already repay the favor when commuting or traveling away from home, as 22 of the state's 46 counties have a Penny Tax.

The tax would be implemented May 1, 2025. Of the 30 projects, infrastructure would take the largest share of the pot with 14 projects costing $64 million. Next would be public safety, for which seven projects would use $38.5 million; six quality-of-life projects would cost $16.15 million; and three economic development projects would cost $6.25 million.

Smith said Sumter is in a prime position, with the experience of the overall Sumter Legislative Delegation, some of whom are in senior positions in the General Assembly, to leverage matching state funds to bring even more money to some of these projects. He pointed to roads, infrastructure and industrial sites as the "main projects that would benefit from the Penny Tax as well as their potential to get additional matching funds."

"In my opinion, is it historical to have the kind of delegation we have, and it gives our community a unique opportunity to harness this moment for good. … By working with (the S.C. Department of Transportation), the Infrastructure Bank and other state and federal agencies, we have been able to also take full advantage of opportunities where we can match funds with non-resident taxed monies," Smith said.

He said this is the right moment for a Penny Tax that can bring in additional matching funds because "our delegation will not always be so uniquely stationed."

"By not implementing the Penny Tax again, I believe we will miss opportunities that could cost Sumter tremendous unrealized potential," he said, "and by the time the opportunity comes back around, the delegation will not have the influence to secure the maximum potential from it."

Ed Bynum, chairman of SumterEDGE's Penny for Progress 2024, said part of the initiative's strategy is to "capitalize on having Sumter so well represented at the Statehouse." Bynum served as chairman of the Greater Sumter Chamber of Commerce's board of directors in the early 2000s, when a goal was to "simply get a stronger voice" at the state level. At that time, Smith was a green legislator, being elected first in 2001.

"We knew the importance of the Ways and Means Committee, and we visited our state capital several times just to meet legislators and shake hands and try to improve our position," he said. "At the time, we just wanted one person from Sumter to be on the Ways and Means Committee."

After Smith assumed the speaker position in May 2022, state Rep. David Weeks (D-Sumter) was selected to serve on the Ways and Means Committee, which writes the first draft of the state's budget.

"… This Penny in a lot of ways provides the basic structure for our success," said Bynum, referring to manufacturing and commercial sectors and downtown redevelopment. "Anything you build requires a solid foundation, and these Penny funds in a lot of ways are providing a stable framework."

In November 2022, after passing the previous two projects lists in 2008 and 2014, the initiative failed to secure majority support by 469 votes out of a total of nearly 27,400 votes cast. More than 100 came from one precinct, a rural area bordering Florence County. More than 2,000 ballots had the referendum question blank.

A historic economic development project has been formalized since, with the eVAC facility now under construction, and that was a win for economic development leaders, but they lost two years of planning sites to pitch to other companies.

In 2008, Thomas McElveen (D-Sumter) was not a state senator yet, but he helped lead community support for the first Penny Tax. He said he thought the "big-ticket item," being a lawyer, was a new judicial center, but the project with the real, longest-lasting, widest-reaching benefit was bolstering infrastructure at Pocotaligo Industrial Park.

"Without that, we'd never have gotten Continental Tire," McElveen said. "We didn't realize how big it was."

The tire manufacturing plant, which employs approximately 1,300 employees, celebrated its 10th anniversary this summer.

"What's most impressive about the 2008 Penny was that we were more or less still in an economic recession, but voters made a decision to invest in this community. That was in 2007, and we just didn't have the things we have now," McElveen said.

McElveen, who has served in the Senate since 2013 but is not seeking reelection this November, said he would "much prefer" a capital sales tax than seeing property taxes increase. Both legislators, who sit on opposite sides of the aisle, echo each other's sentiments that without approval of this referendum, it will be harder to bring state funding to "any project," Smith said, without the matching funds of the Penny that are required for many allocations to be awarded.

"At that point, the mechanism for getting projects funded would have to include some form of raised taxes," Smith said. "I would imagine that far less progress would be made on projects of all kinds, and the impact would be felt deeply across our community."

Smith noted that matching funds don't just include state monies but also support from philanthropic organizations like the Williams Brice Foundation. To fund projects, all elements of the formula are critical, he said.

"I believe without one, the Penny Tax funds," he said, "we do not have the others."