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reprint or license thisSenate leaves tax relief to voters
Issue is likely to end up in conference committee
By JOHN O’CONNOR
johnoconnor@thestate.com
The S.C. Senate agreed Tuesday to a property tax reform plan based solely on county-by-county referendums, a local option plan that was ultimately the only way senators could reach a final agreement.
The Senate version differs sharply from a wide-ranging tax-swap plan the House passed in March. It also drops the small statewide sales tax hike contained in a Senate plan that gained key approval last week but ran into resistance Monday.
While the approach won the approval of most senators and the business community, tax relief advocates were not satisfied. House members have questioned the county-by-county approach, and its fate in a coming conference committee is unclear.
The compromise came after hours of backroom negotiations. Lawmakers realized, after weeks of floor debate, no plan would secure the two-thirds of senators needed to change the state constitution. A constitutional amendment would have been required for most plans because they would have taxed owner-occupied homes differently than all other types of property.
The Senate chose the only remaining option.
“I’d prefer a more targeted approach, but this is the only approach that we could get through the Senate,” said Sen. Larry Martin, R-Pickens.
The new Senate plan would apply tax relief across the board to all classes of property, should local voters agree to do so. In the past, lawmakers had aimed most relief at owner-occupied homes.
The plan also drops a half-cent statewide increase in the sales tax.
For change, voters must approve raising the sales tax in a referendum. Residents can petition the sales tax swap onto the ballot, or county council can propose a plan to be approved.
Senators said the plan would allow tax relief for those who want it while avoiding the sticky issue of causing poorer residents to pay tax relief for wealthier residents in high-growth real estate markets.
“Any time you allow the people to vote, it’s a good thing,” said Senate Majority Leader Harvey Peeler, R-Cherokee.
“It’s a beautiful, beautiful plan,” said Senate Minority Leader John Land, D-Clarendon.
But many were unhappy, saying the tax plan did not do enough to help homeowners or to change the way the state funds schools.
“I’m not sure it gives anybody anything,” said Becky Fagg, a Lexington County resident who has been lobbying lawmakers for weeks for tax relief. “It’s definitely not homeowner-friendly.”
Three senators — Larry Grooms, R-Berkeley; Vincent Sheheen, D-Kershaw; and Clementa Pinkney, D-Jasper — voted against the plan. Grooms consistently pushed for a broader plan to raise the state sales tax and impose a state property tax and other fees in order to remove school taxes on owner-occupied homes and other property.
“This plan allows members of the Senate to say we didn’t kill property tax relief,” Grooms said, calling it a “political scapegoat.”
“I can’t conceive of a situation where a homeowner would get more relief than they would pay in sales tax.”
With final Senate approval, the tax debate now moves back to the House. The House will likely reject the Senate plan, setting up what could be a contentious conference committee to strike a compromise.
House leaders have said they would delay approving a budget if the Senate did not approve enough tax relief this year.
Peeler said the debate could be “the mother of all conference committees,” but others thought many House members could support the idea.
Reach O’Connor at (803) 771-8358.
