On the same page

South Carolina Gov. Mark Sanford seems to have much better relations with lawmakers this year than last. That's good news for Republicans who control both the legislative and executive branches of government. It's better to make nice than to feud, especially during an election year.

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The latest indication of peace and cooperation between the two branches was on display Tuesday as the GOP legislative leadership endorsed the centerpiece of the governor's economic growth plan: to gradually cut the state's income tax, the highest in the South and fifth-highest in the nation, from 7 percent to 4.75 percent over the next 10 years.

Last year, Sanford's first year in office, communication between him and lawmakers was not smooth. They each went their own way and the governor's agenda got short shrift. This year, everyone is on the same page.

The problem with the governor's income tax cut plan, which he campaigned on in 2002, is the state's humongous budget shortfalls - at least $350 million this year. How can taxes be cut when revenues are needed to get the budget back in balance?

The answer is, the income-tax cuts won't happen all at once; they're phased in over 10 years. Plus, each year's cut won't occur unless state revenues rise by 2 percent that year. That level of increase, coupled with belt tightening elsewhere, should grow revenues enough to get the budget back in balance.

But just to make sure, the tax-cut legislation will be introduced apart from the budget. That, plus tying the tax reductions to the 2-percent growth in state revenues, guarantees the cuts won't worsen the fiscal crisis.

"Income has to grow in order for (the income tax) cuts to kick in," says state Sen. Greg Ryberg, R-Aiken, who supports the governor's plan. "It gives us the failsafe."

Sanford, Ryberg and other income tax cutters expect the reductions to spark a turnaround in the state's economy, much as President Bush's income-tax cuts are doing for the national economy. But not everyone likes the idea. Democrats are wary of any tax cuts. They want any revenue growth to boost education and Medicaid funding first.

"Until we do that," says state Sen. Tommy Moore, D-Clearwater, "how can we talk about reducing revenue...?" Moore has introduced his own targeted tax cuts, but they aren't likely to go anywhere. He's in the minority.

He might have better luck pushing to increase cigarette taxes, as Gov. Sanford also wants to do, to more fully fund education and Medicaid.

Income tax cuts, coupled with a cigarette tax hike, might very well help the state climb out of its deficit crisis, improve its economy, and pay for education and health care programs.

--From the Monday, February 23, 2004 printed edition of the Augusta Chronicle