COLUMBIA - The chairman of the powerful House Ways and Means Committee says increasing the state's sales tax by a penny on the dollar and eliminating some exemptions from that levy would generate enough money to end car taxes and limit future home tax increases.

Rep. Bobby Harrell, R-Charleston, says a bill he is lining up sponsors for also calls for reducing overhead spending on the state lottery and making ticket sales subject to the state's sales tax.

The changes would bring a new source of support to state schools, Harrell said. While eliminating car taxes for residents, the proposal also sends more money to public schools from tourists.

"For the South Carolina people, this is a tax cut, but we will be allowing tourists to participate in our schools - up to about $73 million," Harrell said.

"I think we're all trying to find an answer to the public's complaint about property taxes," Harrell said, referring to other proposed plans. "I think ultimately we'll all work together on something."

Harrell says his plan generates about $513 million by raising the sales tax.

Eliminating seven exemptions generates almost $43 million, with nearly $34 million coming from lottery tickets and almost $5 million from eliminating a sales tax holiday held each August. Cutting lottery overhead to 6 percent of sales instead of 8 percent would generate $14 million, Harrell said.

Harrell puts most of the money into eliminating car taxes in three years, with $461 million in the first year going to replace money schools would lose.

Harrell's measure eliminates property tax reassessments.

Taxes on homes would still go up.

His measure doesn't address rising costs of school operations tacked onto tax bills.

Higher values in homes would be reflected when homes are sold.

New owners would pay the new, higher assessed value of the home, Harrell said.

Limiting local governments' ability to raise taxes poses a big challenge for all the plans. Harrell's plan requires a two-thirds vote in the House and Senate and could become effective in January 2005, he said.