The Times and Democrat - SUNDAY EDITORIAL

~ the issue ~

Tax-relief plan

~ Our opinion ~

School tax increases just one issue facing lawmakerss

The Legislature was determined to give taxpayers property tax relief in some form in an election year.

Well before any relief approved in 2006 takes effect, it appears what many taxpayers will get is a higher bill. It’s happened locally and in 20 or so other districts around the state that raised taxes – largely to avoid using reserves and to put in place tax rates that will be the basis for funding next year when “relief” kicks in. At that time, local school districts can no longer levy property taxes on primary residences.

Another part of the new law also encourages tax increases. Lawmakers prohibited local governments and schools, beginning next year, from raising taxes more than the growth in inflation plus population. Where elected leaders saw a need for tax increases, this was the year.

The new law will take school operating costs off of homeowners’ tax bills, to be replaced with an increase in the state sales tax to 6 cents. The sales tax on groceries will be reduced from 5 cents to 3.

Orangeburg Consolidated School District 5 trustee Melvin Crum went to great lengths to explain the situation as trustees were approving a tax increase here.

“I don’t see anything in that legislation that says school districts can build reserves,” Crum said during the public budget discussions. “Pretty much whatever you have in the bank right now is what you’re going to have for reserves” for years to come.

“My suggestion is (to) max out the millage and save as much in the fund balance as you can,” Crum said. The tax increase “is to be proactive and try to set the stage for what might come.”

“While it will hit the homeowners a little bit heavy this year, next year it goes away, so I would think that any rational-thinking person would agree to the concept to protect your (interests),” Crum said.

“I want the public to understand that this is not to be vicious and just slap taxes on you,” Crum said. “If you cut yourself short and costs increase, you’ve locked yourself into a quandary. We are simply trying to protect our interests, and (other school boards are) trying to do the same.”

In other words, holding the line this year stands to cost districts next year. That’s surely not what lawmakers had in mind.

Sen. Larry Martin, R-Pickens, wants to change that – and he likely will by galvanizing legislative sentiment to roll back the base of funding to 2005 levels. He’s proposing legislation to do just that, saying, “It’s about fairness. It’s about equity. It’s about doing the responsible thing.”

Importantly, the tax increases do stand to be permanent for businesses and rental property owners as they were not included in the tax-relief plan. Arguing that the higher taxes stand as an obstacle to development here and around the state is logical.

The bigger picture is the one being talked about by the likes of Orangeburg Sens. John Matthews and Brad Hutto. School funding should be addressed in a comprehensive fashion – based on dollars per pupil and needs, not on tax rates and tax-relief plans. Without such, tax relief as constituted stands to put at least some schools in a funding crisis in the coming years.

Let’s hope an examination of education funding will be high on the list of legislative priorities when lawmakers return to Columbia in January after the November elections. Tax-relief problems alone will make it a higher priority.

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