The Ins and Outs of Aiken Mayoral Campaign Finances

by Don Moniak
November 3, 2023

Three candidates vying for the Mayor of the City of Aiken position faced off in the August 8, 2023, Republican Primary election. Incumbent Mayor Rick Osbon earned 1,556 votes (42.6%), and challengers Teddy Milner and Kathryn Wade respectively earned 1,070 votes (29.3 %) and 1,026 votes (28.1%). In total, challengers bested the incumbent 57.4 percent to 42.6 percent.

Because Mayor Osbon did not gain the support of more than fifty percent of the votes, a runoff election on August 22nd was required between the top two candidates. Teddy Milner won that election by only fourteen votes, 2,135 to 2,121.

CandidateCash ContributionsIn-Kind ContributionsExpenditures
Milner $25,555$2,000$19,899
Osbon $43,224$2,753$44,091
Wade $3,348$350$3,698
Table 1: Total Cash and In-Kind Contributions, and Expenditures of the City of Aiken’s 2023 Mayoral Candidates

The campaign finance disclosures for all three candidates, through September 2023, are now available from the South Carolina Ethics Commission. The total contributions and expenditures reported from that information is in Table 1. Teddy Milner remains the only candidate with an active campaign, as both the Osbon for Mayor and the Wade for Mayor campaigns have closed out their accounts and can no longer raise funds.

In summary, the disclosures show some of the following trends and highlights:

  • Relative to spending during the Primary campaign, the Wade campaign easily achieved the most votes per dollar spent—$3.25 per vote tallied. In contrast, the Milner campaign spent just under $16 per vote tallied, and the Osbon campaign spent just over $19 per vote.
  • The Osbon campaign spent ninety percent of its contributions to hire an outside political campaign and public relations firm to help manage the campaign and produce and distribute all of its advertising.
  • Both Milner and Wade ran grass-roots campaigns, did not hire any professional political operatives, and spent a major portion of their contributions on local businesses.
  • The Osbon for Mayor campaign was the only campaign to accept a donation from a Political Action Committee (PAC), and from developers who are identified only by their company name.
  • The Osbon for Mayor campaign raised the most funds from outside sources ranging from Florida to Chicago to Connecticut. The Wade campaign funds were derived entirely from local contributors, and the Milner campaign had only four out-of-state contributions by individuals.

    The reason for this emphasis on “outsider” contributions and special interest contributions and expenditures is two-fold:

    1. As described in The Monkey in the Room, a stealth effort to elect Rick Osbon as Mayor via a write-in campaign was revealed on October 18, and that campaign was seeking to hire an unidentified, outside political operative. Mayor Osbon signed a legal pledge to abide by election results, but the loophole for enforcing that pledge is the lack of an “active” campaign by a defeated party.

    Most recently, the campaign became more overt with a letter to the editor of the Aiken Standard by Osbon campaign contributor Sam Erb, suggesting that Aiken residents write in the “defeated candidate’s name.”

    2. Even without this latest development, the Osbon for Mayor campaign was the only campaign to castigate “outsiders” and “special interests” as a negative factor in the election process, when its campaign management firm mailed a flyer to voters headlined:

    OUTSIDERS AND SPECIAL INTERESTS CONTINUE TO
    FALSELY ATTACK MAYOR OSBON.” (Figure 1).

The flyer appeared shortly after the Osbon for Mayor campaign issued a news release touting endorsements from “20 Conservative Leaders.”

Half of these conservative leaders, who were all deemed as “local” in the “Outsiders and Special Interests” flyer, live outside of Aiken city limits and are ineligible to vote in City of Aiken elections. Four of them do not even live in Aiken County. (1)

Figure 1: This political campaign flyer was mailed to an unknown number of Aiken voters. Four of the “local conservative leaders” live outside of Aiken County, and seven or eight others are county residents who are ineligible to vote in the City of Aiken.

A note on “Outsiders” and “Locals”.

Technically, an outsider in any election is a nonresident ineligible to vote in the jurisdiction. But the City of Aiken is a county seat, and a hub of regional commerce and medical care, so county residents often must visit Aiken to conduct county business, seek medical care, or access necessities. Without spending by county residents, the City of Aiken would likely shrivel to a fraction of its size.

Since most Aiken County departmental headquarters are located in the city, all county residents have a vested interest in the election because their tax payments help subsidize the City of Aiken’s economic base; and decisions made by the City of Aiken can greatly influence County spending decisions. Furthermore, some of the contributing Aiken County residents own businesses in the City of Aiken and pay business license taxes.

From a practical matter, city residents can only be sorted from county residents with a 29803 or 29801 zip code through a tedious search in the Aiken County property database, a method that also does not work for anyone renting their home.

Therefore, for the purposes of this summary, “outsiders” are considered to be outside of Aiken County in terms of their address and ineligibility to vote in the election. This does not imply that outsiders do not have any vested interests in Aiken County, some are not benefactors, or that a candidate is beholden to any contributor. The summary is not final, as the Milner campaign is still eligible to raise funds and is known to be spending funds.

The Ins and Outs of Expenditures.

Outside influence was most evident in the expenditure columns, summarized in Table 2.

CandidateLocal Non LocalCampaign/PR Firm
Milner$20,697$3530
Osbon$2,753$43,030$42,983
Wade $2,953$5450
Table 2: Campaign Expenditures

The Osbon for Mayor campaign spent ten percent of its cash contributions on local businesses Newberry Hall and the Inn at Houndslake. The other ninety percent was spent on a Columbia-based political campaign and public relations firm called First Tuesday Strategies (FTS). How and where FTS spends its consulting fees is unknown.

Former South Carolina Republican Party Chairman Matt Moore is the firm’s managing partner. (2). Moore was also one of the twenty “local conservative leaders” who endorsed Rick Osbon for Mayor.

The first payment to FTS, for $30,482, was reported as being on August 9th, the day after the primary and the beginning of the runoff campaign. At the end of the campaign, FTS received an additional $12,983 payment, for a total of $42,983. The work completed by the firm was listed as “Campaign Direct Mail, Direct Text, Social Media ads and management and brochures.”

One of the First Tuesday Strategies’ direct mailings came under scrutiny during an August 17th candidates forum, when Mayor Osbon failed to recognize one of his campaign flyers. The issue arose when a citizen pointed out the word “woke” in the flyer, and asked Mayor Osbon to define the term in his own words.

Mayor Osbon denied the flyer was from his campaign five separate times during the ensuing discussion. This in turn led some of his supporters to label the flyer as fake. As for the term “woke,” Mr. Osbon said, “it is not in my vocabulary.”

After the meeting, Mayor Osbon acknowledged to the Aiken Standard that the brochure was from his campaign. The Standard, for its part, chose to bury that information deep in its story about the forum, even though the gaffe and resulting uproar were the highlight of the evening.

Neither the Wade for Mayor nor Milner for Mayor organizations hired any professional political consultants to manage or help manage their campaigns.

The Wade campaign spent 85 percent of its campaign funds on Aiken County businesses. The Aiken Horse, Reuben Cora Designs, and Tyler Press were paid for advertising, flyers and signs, and website design, respectively. The organization’s only significant outside expenditure was $500 involving three payments to a mass texting service from Washington, D.C.

The Milner campaign spent 97 percent of its cash contributions on Aiken County businesses. Innovative Solutions and Quality Printing and Graphics were paid to make flyers, buttons, and signs. Paid advertisements appeared in The Aiken Horse, The Aiken Leader, and the Aiken Standard. It’s sole outside expenditure was $353 for campaign buttons from Amazon.com.

The Ins and Outs of Contributions:

The shorter-lived Wade campaign had 14 contributors, only two from outside the county, and none from out-of-state. Just under 95 percent of her cash contributions were local.

The Milner campaign has had ~60 contributors as of September 30th, of which all but six were local; and 86 percent of her contributions were local.

The Osbon campaign had ~92 contributors, of which ~73 were local; with ~29 percent of his funds from outside the county. This contrasts substantively with his 2015 campaign. In that campaign more than 90 percent of contributors were local, out-of-county and out-of-state contributions collectively totaled less than five percent of cash contributions, and special interests and outside developers were absent from the list.

CandidateAiken CountyIn-State, Out of CountyOut of State 
Milner$22,035$1,500$2,020
Osbon$29,674$4,750$7,800
Wade $3,34800
Table 3: Cash Contributions

This year, Osbon for Mayor’s outside contributions from individuals, development firms, and one special interest group, all of whom are ineligible to vote in City elections included:

  • $1,000 from the South Carolina Realtors Political Action Committee. 
  • $3,000 in contributions from three Miami, Florida residents who are prominent within the firm Property Markets Group (PMG), whose website features panoramas of the New York City and Miami skylines on its homepage.  The company has a multi-billion dollar portfolio of condominiums and other residential units “totaling more than 8,500 residential units and over 16 million square feet of development” spread across six different states.(3) 
  • $2,000 on August 9th, the day after the Primary, from Equus Holdings LLC of Hollywood, SC.  On October 9, 2023,  the firm gained final approval from City Council for its concept plan for a four-story hotel and townhouse development at Beaufort Street and Richland Avenue. 
  • $1,000 from SE Aiken LLC,  an Augusta-based developer whose firm Southeastern LLC is redeveloping the  Aiken Mall, and who also was the sole-source developer of the new Aiken Public Safety Building and new City Hall. 

The Project Pascalis Connection

Locally, the Osbon for Mayor campaign collected $7,100 from Project Pascalis investors and decision-makers, including $3200 in total from two former AMDC members, Philip Merry and Chad Matthews. (4) Notable among the Pascalis investor contributions was $500 from Aiken Attorney William Ray Massey, who was the most instrumental, publicly known figure on the private side of both “public-private” Project Pascalis efforts.

Summary

In a campaign flyer sent to an unknown number of Aiken voters, the Osbon for Mayor campaign lambasted unidentified “outsiders” and “special interests” as “attacking” Mayor Osbon. When asked to identify examples of these “attacks,” neither candidate Obson nor his campaign management firm chose to respond.

Meanwhile, the Osbon campaign was accepting thousands of dollars in outside contributions, spent 90% of contributions on an outside professional political campaign firm, and touted the endorsement of ten politicians who are ineligible to vote in city elections. In contrast, both the Wade and Milner campaigns kept their spending local and relied mostly on local funds from individuals.

Footnotes:

(1) The twenty conservative leaders listed in the Osbon for Mayor news release were :

United States Congressmen, Joe Wilson and Jeff Duncan; South Carolina State Senate Majority Leader Shane Massey, Senator Tom Young; State Representatives Bill Hixon, Bill Taylor, Bart Blackwell, Melissa Oremus; Aiken County Council Chairman Gary Bunker, Vice Chairman Andrew Siders, Ron Felder; Aiken City Councilwomen Andrea Gregory, Kay Brohl, Councilmen Ed Girardeau, Ed Woltz; former State Senator Greg Ryberg; Aiken County Sheriff Mike Hunt; Solicitor Bill Weeks; former SCGOP Chairman Matt Moore and former Aiken County Republican Party Chair K.T. Ruthven.

Joe Wilson, Jeff Duncan, Shane Massey, and Matt Moore all live outside of Aiken County and are ineligible to vote in the City of Aiken. Joe Wilson’s and Shane Massey’s districts do include Aiken County.

Bill Hixon, Bill Taylor, Melissa Oremus, Andrew Siders, Ron Felder, and Mike Hunt are Aiken County residents, but do not reside in the City of Aiken, and are ineligible to vote there. Siders’ district does include parts of the City of Aiken.

The list of Osbon for Mayor endorsements did not include County Councilman Phil Napier, whose District Six includes parts of the City of Aiken; nor the four remaining County Council members. Republican candidates James Hankinson (County Council District 8) and DeMarcus Sullivan (City Council District One) also declined to openly endorse any candidate.

K.T. Ruthven is currently President of the Aiken Republican Club. In response to an email question as to whether he was pursuing a write-in election—as well as a letter to sixteen of the elected officials who endorsed Osbon for Mayor officials asking for their preference in the General Election—he stated he was not a write-in candidate and that as President of the Aiken Republican Club he supports the party nominee—but did not name Teddy Milner as that nominee.

(2) FTS also received $8,000 in the 2015 Osbon for Mayor campaign. That year, twenty percent of expenditures were local. In contrast, Lessie Price spent eighty-percent of her campaign funds on local businesses and consulting.

(3) PMG does have an Aiken County connection, as co-owner of the Tod’s Hill equestrian subdivision north of Aiken along Cook’s Bridge Road. Aiken County land records list PMG as the co-owner of 12 unsold lots. The other Tod’s Hill co-owner is Cook’s Bridge LLC, whose address in county records is the same as as PMG’s: 220 5th Avenue, 9th Floor, New York, New York.

Cook’s Bridge LLC purchased the approximately 640-acre, 40-lot subdivision, originally called “The Plains,” in 2013 for $1.35 million. Since that time the PMG holding firm has sold numerous 10-acre to 22-acre parcels for ~$10-15 thousand per acre. The sale signee for several purchases in 2021 was Cook’s Hill LLC Vice President Dan Kaplan, who is also an MPG Managing Partner.

Karl McMillan is identified as the contact for Tod Hill. McMillan is also the agent and sole member (as of December 2020) of Equus Holdings, LLC, the Hollywood, South Carolina firm identified as the developer of a complex of townhomes and a four-story hotel at Beaufort Street and Richland Avenues. Equus Holdings also owns one residential property in the city.

(4) Notably missing from the “Pascalis” list are former Aiken Municipal Development Commission members Chairman Keith Wood and Vice Chair Chris Verenes. In their December 9, 2023 resignation letters, both Wood and Verenes identified only two Council members willing to hear their debriefing on the issues associated with the failure of Project Pascalis. Mayor Osbon was one of the five members reportedly unwilling to meet.

The result is that City Council has yet to be debriefed by the two top members of the AMDC regarding the failure of Project Pascalis that cost taxpayers at least $10.5 to $11.0 million from land purchases, legal costs, consultants, project management, employee labor, tenant relocations, property management and maintenance, and other project expenditures.

If the actual costs have been quantified by the City of Aiken, that information has yet to be disclosed. The less tangible costs, such as the loss of public trust described by Councilwoman Lessie Price at a special-called January 17, 2023 Council Meeting, cannot be quantified or adequately measured.

More Than Pennies: The 2024 Confluence of One-Percent Sales Tax Referendums.

How will Aiken County voters respond in 2024 to two separate one-percent sales tax referendums on the same ballot?

by Don Moniak
October 31, 2023

|On October 7, 2023, a letter was sent to more than thirty elected officials across the county—-Aiken and North Augusta City Councils, Aiken County Council, the state legislative delegation, and the School Board—asking seven questions about Aiken County one-percent Capital Project Sales Tax and the Aiken County School District’s one-percent Education Capital Improvement sales tax for school construction projects.

That letter and responses to date can be found in A LETTER TO AIKEN COUNTY’S ELECTED OFFICIALS REGARDING ONE-PERCENT SALES TAXES, a permanent page that will be updated as elected officials provide more responses, either directly or indirectly.

This background article is the first in an intermittent series that will address sales tax issues and the November 2024 referendums. The topics will include past accomplishments, luxury projects vs necessities, the various public debates, and the compilation of projects for the 2024 referendums. Any letters to the editor or other offerings are appreciated.

One-Percent Sales Tax Background

In November of 2024, Aiken County voters will encounter two individual one-percent sales tax referendums on their general election ballot:

1. The Capital Project Sales Tax (CPST)—used to fund capital projects and vehicle and major equipment purchases across the County (1) and its cities and towns.
2. The Aiken County School District Education Capital Improvement sales tax (School tax)—used to to fund new school construction and renovations of existing schools.

These two taxes are already in place, but due to expire. The 2024 general election will be the first time voter referendums on both taxes will be on the same ballot; and the first time since 2004 that a referendum is on a Presidential ballot.

One-Percent, One-Cent, or A Penny?

Both local sales taxes involve extracting revenue from consumers at a rate of one percent of all retail purchases, with the exception of unprepared foods. (2)

Both local sales taxes are incorrectly termed as a “penny tax,” or “one-cent tax,” by many government officials and sales tax advocates; and local media generally swallows and regurgitates these two sound bites without question.

But neither of these is a “penny tax” or “one-cent tax,” both are one-percent sales taxes. The system does not add a penny in taxes to each sale, it adds one cent of tax per dollar spent on retail products.

Purpose of Local One-Percent Sales Taxes.

Both of the proposed sales taxes can only be used for capital projects, school construction projects, new or renovated county facilities, purchase of new equipment and vehicles, paving of dirt roads, and any other qualifying project. The revenues cannot be used to fund everyday, essential government operations, hire new employees, or give pay raises to existing employees.

Advocates prefer this sales tax revenue approach as a means to avoid property tax increases, yet still provide funding for essential government infrastructure. The CPST was described in 2018 by County Council Chairman Gary Bunker as “very crucial for the future of Aiken County,” and in 2014 by County Administrator Clay Killian as “a godsend.”

In 2014, the Aiken County School District was not ashamed to publicize another advantage: that up to a third of the tax revenues derive from out-of-county residents shopping in Aiken County—even though these outsiders derive no benefits from their payments to the Aiken County School District except maybe a new locker room or two for visiting teams.

New Tax or Existing Tax?

In practical terms, the two referendums might be viewed as a renewal of existing CPST and School taxes.

But each of the five sales tax referendums that have been on Aiken County ballots since 2000 was technically a new tax for two reasons.

First, each Capital Project Sales Tax (CPST) and School sales tax contains a completely new and different set of projects for dedicated funding. The CPST referendum, for example, requires a new ordinance that must undergo three County Council readings and a public hearing. Second, each tax has an expiration date.

Aiken Standard, November 9, 2000. “LOST,” or Local Option Sales Tax, was later changed to CPST, Capital Projects Sales Tax. The name change better reflected the purpose of the tax, with a side benefit of avoiding headlines like LOST lost or LOST loses


History of Tax Referendum Results.

The School District’s first one-percent sales tax referendum was approved during the November, 2014 general election by a margin of 23,909 (59 percent) to 16,407 (41 percent).

The 2014 referendum was for a ten-year school construction program, with proceeds specifically dedicated to constructing the new Leavelle McCampbell Middle School in Graniteville, additions at Aiken High and North Augusta High to replace outdated buildings, plus the construction of Ridge Spring-Monetta elementary and high schools.(3)

In the past twenty-three years, four rounds of Aiken County Capital Project Sales Taxes referendums have been placed on county ballots, and three of four times the referendums have been approved by wide margins.

2000: CPST I : 23,895 (52%) to 22,065 (48%) (Originally called LOST, Local Area Sales Tax).
2004: CPST II: 32,460 (59.7%) to 21, 840 (40.3%)
2010: CPST III: 25,235 (55%) to 20,543 (45%) (closer vote than in 2004, was attributed in part to a Tea-Party surge).
2018: CPST IV: 36,727 (65 %) 19,183 (35%).

But 2024 will be the first year that Aiken County voters will be asked to voluntarily tax themselves at a 2 percent rate on all retail goods except unprepared food.

Aiken School District Superintendent King Lawrence presented the “Penny Sales Tax” plan to the Aiken County Legislative Delegation on August 22. It will be the first one-percent School District sales tax referendum in ten years.


Cumulative Effect of State and Local Sales Taxes

The culmination of the two one-percent sales taxes and the State’s
6 percent sales tax is an 8 percent sales tax in Aiken County for all retail sales except for unprepared foods.

But state law also allows local governments to charge “hospitality” sales taxes on prepared foods, and these sales taxes are also slyly marketed as one-cent or penny taxes. The City of Aiken enacted a one percent hospitality tax in 2015, and the City of North Augusta’s hospitality tax dings diners at a 2 percent rate—a rate that tends to undermine any “penny tax” marketing by tax-hungry officials.

The accumulation of these sales taxes when purchasing a restaurant meal, grocery store or convenience store hot bar food, or even freshly cut fruit, reaches a level of 9-10 percent depending upon the hospitality tax rate. This taxation rate, which is never referred to as a “dime tax,” means people dining out in Aiken and North Augusta involuntarily tithe the government two-thirds as much as the standard fifteen percent voluntary tips to waitresses, waiters, bartenders, and other servers.

What If?

As a result of years of dependency on voter-approved, one-percent sales taxes for capital projects, local government officials tend to take the revenues for granted. Planning is already ongoing to compile a list of projects for the referendum, but the very act of making that list can have the effect of assuming the next referendum will pass and allow both essential and pet pork projects to be funded. For example, at a recent Aiken City Council meeting, city officials informed citizens concerned about the condition of the Smith-Hazel Recreation Center’s gym floor that funding to correct its subpar condition will be in the next CPST.

But whether viewed as a renewal of existing tax or new taxes, under current referendum plans Aiken County voters will be asked for the first time to essentially tax themselves at a 2 percent rate. The fact that the referendums will be on the Presidential election ballot, which attracts considerably more voters, might add more uncertainty to the vote.

What will happen if voters say no to one or both of the referendums, and choose instead to force local governments to adapt to fewer funds? So far, there is little evidence that elected officials or their administrators have considered that possibility.

FOOTNOTES

(1) Aiken County Capital Sales Tax Projects from 2000 to present can be viewed from this county webpage.

(2) These county-wide sales taxes are authorized by South Carolina law, which permits counties and municipalities to choose to either exempt or allow sales taxes to be collected for unprepared food purchases. Unprepared foods are defined as any food product that can be purchased with USDA food stamp program.

Aiken County currently exempts unprepared foods, which is in line with the state sales tax system. Since 2007, the State of South Carolina has exempted unprepared foods from the state-wide sales tax through legislation that also reduced the state rate from seven percent to six percent.

(3) The 2014 APSD sales tax referendum was followed four years later by a bond referendum which passed by a margin of 59 to 41 percent. Unlike the sales tax referendum which was spread across the county, the bond was disproportionately benefitted North Augusta- with $ going to two new schools and two upgraded schools.