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Greenville County settles lawsuit over invalid road fees as refund discussion lingers

Greenville News logo Greenville News 10/13/2021 Genna Contino, Greenville News

This story was updated Oct. 13, 2021, to clarify that the increase of the road-maintenance fee was ruled invalid by the state Supreme Court, not the fee itself.

Greenville County will pay almost $130,000 in legal fees following a lawsuit over road and telecommunication fees that the county collected from its residents over a period of four years.

The state Supreme Court ruled the fees were invalid, and the lawsuit settlement filed Oct. 8 follows Greenville County Council's decision last week not to refund the $30 million in its collection of the fees, rather to use the money for needed road maintenance — though a council member said that decision could be revisited.

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The county will pay a total of $129,351.44 in fees, according to county attorney Mark Tollison.

The total fees and costs for the plaintiffs' legal counsel were $131,717.83, court documents show, but attorneys settled for a little less. Greenville County spent $96,280 on its own in legal fees in the case from April 2017 to October 2020. 

The lawsuit's plaintiffs — three Republican state lawmakers from Greenville County, state Reps. Mike Burns and Garry Smith and state Sen. Dwight Loftis — prevailed in arguing that the fees were illegal taxes.

The plaintiffs' attorney, Robert Childs, did not immediately return a phone call seeking comment.

Dive deeper: Greenville County votes not to give taxpayers refunds for $30 million in illegal fees

The county had imposed an annual $15 vehicle fee in 1993 to pay for road maintenance, and it increased that fee to $25 in 2017, which is the same year that the telecommunications fee was approved to enhance the county's public-safety communications network.

In June, the state Supreme Court found that the increase of the yearly fee on registered vehicles and the annual $14.95 telecommunications fee charged to property owners in the county were invalid. The county will still collect the $15 vehicle fee going forward, according to county spokesperson Bob Mihalic. 

"This Court in recent years has received an increasing number of challenges to purported 'service or user fees,'" Justice John W. Kittredge wrote in an opinion in the state Supreme Court's ruling. "Local governments, for obvious reasons, want to avoid calling a tax a tax.

"I am hopeful that today's decision will deter the politically expedient penchant for imposing taxes disguised as 'service or user fees.' I believe today's decision sends a clear message that the courts will not uphold taxes masquerading as 'service or user fees.'"

a man wearing glasses and smiling at the camera: Joe Dill, Greenville County Council District 17, during the Greenville County Council meeting Tuesday, January 22, 2019. © Ken Ruinard / staff Joe Dill, Greenville County Council District 17, during the Greenville County Council meeting Tuesday, January 22, 2019.

County Councilman Joe Dill said he expects discussion about refunding taxpayers to continue at the next council meeting on Oct. 19, despite last week's vote. Seven council members must be in favor of reopening that discussion for refunds to be reconsidered, according to County Council Chairman Willis Meadows.

SC Supreme Court: Greenville County road and telecommunications fees are illegal taxes

Meadows, Dill and County Councilman Mike Barnes originally joined Burns, Smith, Loftis and state Rep. Bill Chumley in the seeking to overturn the fees. Barnes, Dill and Meadows were later removed from the case because council members cannot sue the entity on which they serve, and Chumley was dropped from the suit because he does not live in Greenville County.

A circuit court judge upheld the fees in 2018, but that ruling was reversed last week. The justices rejected arguments from the county's legal team that the road-maintenance fee provides a unique benefit to county taxpayers, and they also determined that the county failed to support its contention that the telecommunications fee would boost values.

“I am pleased with how the lawsuit turned out because I think it is the right decision," Meadows said after the Supreme Court's ruling.

Council members Lynn Ballard and Chris Harrison, who are opposed to refunding the fees, have said they believe the fees collected were used for what they were intended for, and they've said the county stopped collecting the fees following the state Supreme Court's decision. 

a man wearing a suit and tie: Greenville County Council member Stan Tzouvelekas during a council meeting Tuesday, Feb. 2, 2021. © JOSH MORGAN/Staff Greenville County Council member Stan Tzouvelekas during a council meeting Tuesday, Feb. 2, 2021.

"If we're not going to give the money back, we need to give a minimum of $30 million to roads," Councilman Stan Tzouvelekas said at the end of last week's council meeting. 

Check back for more on this developing story.

Genna Contino covers affordable housing, gentrification and more for The Greenville News. Contact her at gcontino@gannett.com or on Twitter @GennaContino. Subscribe to The Greenville News at greenvillenews.com/subscribe.

This article originally appeared on Greenville News: Greenville County settles lawsuit over invalid road fees as refund discussion lingers

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