Posted on Thu, Jul. 01, 2004


Sanford should veto tax-shifting property tax cap



IF YOU NEEDED evidence of how the General Assembly doesn’t let practicality or constitutionality or even costs to local government (and thus the people they serve) get in the way of trying to rack up bragging rights at the polls, look no further than the property tax cap that legislators rushed into law just before heading out of town for the year.

The cap was a bad idea to start with: Legislators had already given counties the right to cap the increase in property values if they wanted to. But since only one county wanted to, the Legislature decided it was time to step in and order the rest of them to do so. That change will reduce property taxes for homeowners in popular and fast-growing neighborhoods, but it will increase taxes for all other homeowners, cars and businesses.

As little thought as was given to the effect of this tax shift, even less was given to the real-world effects of the cap as lawmakers chose to structure it.

The most urgent problem with the cap is that it is set to take effect immediately. That means the nine counties that are in the middle of the reassessment process that the Legislature wisely requires every five years would have to throw out all the work they’ve done so far and start over, sending out new forms notifying people of new assessed values, and taking a new batch of protests. That takes time, and it costs money.

It’s complicated by the fact that the Legislature didn’t send the bill to Gov. Mark Sanford until the last day of the session, which gives him until January to decide whether to sign or veto it. It is therefore urgent that Mr. Sanford act quickly, either signing or vetoing the bill, or else announcing that he plans to delay action until next year. Every day that Mr. Sanford delays reduces the chance that counties would be physically able to comply with the law if he does sign it.

Fortunately, most of the nine counties left in legal limbo are able to use another state law that allows them to delay reassessment by one year. Richland and Berkeley counties have wisely done so. Of course, this delay is going to cost taxpayers money, as well; if the governor vetoes this ill-considered law, those counties will have to retrace some of the steps they’ve already taken.

The problems that legislators simply ignored in their rush to pass this bragging-rights law don’t stop with bad policy and impracticalities. There also are questions of constitutionality.

North Charleston is in court arguing that the optional cap violates a constitutional provision that requires all property to be assessed at its fair market value. If the court sides with North Charleston, it’s difficult to see how the new cap could survive.

Lawmakers say the constitution allows them to create new “homestead exemptions,” which is what they consider both caps. But that provision also requires that such exemptions be approved by a two-thirds vote. And neither the House nor the Senate can prove it had that with the latest cap, since it was passed on a voice vote.

Thus, the new cap has two potential constitutional weaknesses. If Mr. Sanford signs it into law, someone will go to court to get a ruling, and that will result in the waste of even more tax money.

Any one of these problems by itself would be reason enough for Mr. Sanford to veto this bill, and to do so quickly. The combination of problems — an assault on local autonomy, an ill-considered tax shift, unnecessarily high implementation costs and serious constitutional questions — should make a veto a sure thing.





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