Posted on Wed, Nov. 16, 2005


Lawmakers sharpen bills shifting S.C. taxes


The Sun News

While state House and Senate tax committees refine their proposals today to cut some property taxes by imposing a higher sales tax collection, local governments are watching the discussions closely.

The Senate is proposing cutting taxes on real estate and personal property for school-operation expenses. The House is offering a plan to cut all local property taxes on owner-occupied homes.

Both plans would replace the money with a 2-cent increase in the sales tax.

The committees say they will have legislation ready when lawmakers return Jan. 10.

Rep. Tracy Edge, R-North Myrtle Beach, and Rep. Vida Miller, D-Pawleys Island, are among members on the House tax committee. No area senators are on the Senate committee.

The devil is in the details, said Georgetown County Administrator Tommy Edwards, who has been working in county and city governments in South Carolina for more than 30 years.

"The distribution formula could have a tremendous impact in Georgetown County," as well as Horry and others that have high percentages of tourism and second-home ownership, Edwards said.

The state tax code is riddled with layers of distribution formulas including those that determine how much state money local schools receive and amounts of sales and accommodations taxes that richer counties such as Horry must share with poorer locales.

If the distribution is based mainly on resident population, counties such as Horry and Georgetown could end up with less than they have now, he said.

"It would depend on whether they make any allowances for tourism," Edwards said.

He also is concerned that the formula for the tax breaks might not be as generous as in other counties because of the coastal area's high property values.

Myrtle Beach spokesman Mark Kruea said legislators should study changes in the entire tax structure and not single out one aspect of it.

If the state wants to take away city and county property taxes, Myrtle Beach officials wonder what happens to bonds for improvements that are based on the property tax.

And, Kruea asked, what would happen to special tax districts legislators approved, such as multicounty business parks and tax-increment financing districts?

Moreover, "how does government pay for needed improvements?" Kruea asked.

"We're the ones who provide the services," who put police and firefighters on the streets with tax money. What would happen if that were taken away is important for legislators to consider, Kruea said.

Edwards said he hopes lawmakers limit the shift to school taxes, which are the largest chunk of property tax bills, at about 75 percent. That would provide real relief to most taxpayers, especially coupled with a freeze on property values until the property is sold, he said.


Blueprints

House and Senate plans both cut property taxes and replace them with an additional 2-cent sales tax; groceries would be exempt

Senate | Eliminate taxes for school operating costs on all real estate and personal property

House | Eliminate all property taxes including schools, city and county, on owner-occupied homes only


Contact ZANE WILSON at 357-9188 or zwilson@thesunnews.com.




© 2005 The Sun News and wire service sources. All Rights Reserved.
http://www.myrtlebeachonline.com