An S.C. Senate Finance subcommittee did well last week in rejecting the S.C. House plan to eliminate residential property taxes and make up the lost revenue with a 2 percent sales tax increase. The senators recognized that the House plan would cripple local governments and transfer too much of the tax burden to businesses and low-income South Carolinians, while weakening the S.C. tourism economy.

Instead, Finance subcommittee members began work on a plan that would remove only school taxes from residential property tax bills. Their concept: The state should finance S.C. schools while homeowners continue financing counties and cities via the mill levy.

This idea is better than the House plan, but still dangerous. In most S.C. counties, the school property tax makes up almost two-thirds of typical tax bill, with cities, counties and other local governments claiming the rest. That's a lot of financial responsibility for the state to assume.

If the General Assembly adopted this conception for property-tax relief, some other tax would likely have to be raised to ensure that public school budgets are made whole (unless slashing school spending statewide, a terrible idea, is also part of the plan). If legislators elected to close the school-finance deficit with higher sales taxes, the consequences could be dire.

A tax-relief plan along these lines would be hard on Horry County. The Board of Education would lose its autonomy to finance school operations locally. While Horry County Schools would get more state school aid than it gets now, county taxpayers, especially retailers, also would be sending much more sales-tax revenue to Columbia than they do now. The state, in turn, would distribute most of "our" extra revenue to school districts in other counties.

Our school district's highly vaunted academic flexibility would be diminished. The school board and administration would find it much harder to create and finance programs to meet the educational needs of kids with special problems, as they can now.

Low-income residents, meanwhile, would be paying a higher share of the tax burden - even if groceries were no longer subject to the sales tax. They can't shield as much of their income from sales taxation as middle-class people who have retirement and savings accounts. And because lower-income folks rent or own modest homes, their school property-tax breaks would be small.

Meanwhile, small businesses would suffer. Sales-tax increases drive up prices and drive away some customers. Their owners, in turn, would have to pay higher sales taxes on the items they buy, computers, for instance. And because commercial and industrial property would still be subject to the school property tax, pressure on businesses to assume more of the tax burden would rise over time.

The ray of hope in all this: S.C. senators unlike House members, don't face the voters this year. They don't have to worry about looking good on this issue, but can and should worry about doing good. Their best course is to develop less costly legislation to relieve the homeowners hit hardest by last year's tax revaluations - the only tax relief South Carolina really needs.