A SPECIAL SENATE panel’s plan to swap school property taxes on
cars and homes for a higher sales tax has the potential to more
adequately support poor schools while reducing some of the anger and
hardship associated with rising property taxes.
It also has the potential to make poor people pay more for less —
by creating an even more regressive tax system while locking in
school inequities — and at the same time undermine the concept of
local self-governance and do long-term damage to our state’s ability
to fund essential services.
Whether this plan becomes a way to move our state forward or to
hold it back depends on how legislators deal with several unanswered
questions.
The plan would mark a profound change in the way we approach
education, by eliminating all local control over school funding. As
much as we prefer local control of schools, though, we believe this
plan is an appropriate place to begin a discussion, because it seems
unlikely that South Carolina will ever provide children in poor
districts access to the same educational opportunities as those in
wealthy districts until it fully embraces the fact that education
funding is the state’s responsibility — as this plan would do.
Beyond that, the property tax now pays for 40 percent of state and
local services in South Carolina, an uncomfortably large portion
even for a popular tax.
The most important unanswered question at this point is how state
tax money would be distributed to the schools. If lawmakers simply
give each district the same amount of money it now receives, they
will further institutionalize the inequities that are dragging down
our test scores and our children by tying a child’s opportunity to
learn to where she happens to live.
Nearly as important is precisely where that money comes from.
Simply increasing the sales tax by 2 cents — even if groceries are
exempted, as the panel proposes — would dramatically shift the tax
burden to the poor, and force them to pay a much higher portion of
their income in taxes than everybody else. It also would threaten
the state’s ability to continue providing the current level of
services without increasing tax rates, because an ever-increasing
share of consumer spending is on untaxed items — be they services or
Internet purchases or goods the state has exempted from
taxation.
Both of these problems could be greatly reduced by eliminating
many sales tax exemptions and expanding the number of services that
are taxed. We’re glad senators are talking about eliminating the
most egregious exemption — the $300 cap on automobile sales taxes.
But that’s not nearly enough.
We’re deeply troubled that several senators seem determined to
pair what could be a smart reform package with their knee-jerk
opposition to representative democracy, by placing new state limits
on city and county taxes. And while lawmakers are toying with
letting each county choose from a list of property assessment
methods, we’re concerned that all the options are bad.
Fortunately, it’s still early, and the Senate panel has not
agreed to any of these bad ideas — or completely rejected any of the
good ideas. Indeed, senators have already rejected some very bad
ideas. Making smart choices will be extremely difficult; the bad
choices often are more popular with the loudest special interests.
But senators have begun a process that can do a great deal to
improve our state. They need to follow through.
