State & Regional Interest Updated: 04/11/06
Senators struggle with property tax relief
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By SEANNA ADCOX,
COLUMBIA, S.C. (AP) - A property tax relief plan began unraveling on the Senate floor Tuesday, as both Democrats and Republicans called it defective.

Senators couldn't even agree on where to start the debate on the bill that barely passed committee last week.

The Senate adjourned without deciding whether to accept the committee plan as the starting point or revert to a plan the House sent over in February. Senators made it clear either proposal would be changed as debate continued.

"I never thought I'd say this because I know it has problems. ... There are two offers on the table. If it's 'Deal or No Deal,' we'll take the House bill," said Senate President Pro Tem Glenn McConnell, R-Charleston.

Senators sent the committee plan to the floor last week knowing it lacked broad support. They want to pass some form of property tax relief before the budget hits the floor.

The existing Senate plan would raise the state sales tax by a penny, to 6 cents, and apply the relief to owner-occupied homes and personal vehicles, and create what's known as an income circuit breaker. Under that, homeowners would pay no more than 5 percent of their household income on property taxes.

The proposal would cut school operating costs from vehicles and from homes valued at up to roughly $180,000, though the exact threshold would vary by county. That would cut tax bills in half for more than 90 percent of homes statewide.

"I will say, the Senate plan is vastly better than the House plan," said Sen. Wes Hayes, R-Rock Hill. "All that's in (the House bill) for business is a tax increase. We will see real problems competing" with neighboring states.

Hayes took the podium to explain the proposal, which was crafted in his subcommittee, even though he dislikes it. He voted against it in subcommittee and committee, preferring a scaled-down version that increased the state sales tax by just a half-cent.

Sen. Ralph Anderson, D-Greenville, criticized the plan Hayes explained as "Robin Hood in reverse," raising the sales tax on the poor to benefit richer homeowners.

McConnell blasted it as not giving enough relief to homeowners in his district, where property values are skyrocketing. Charleston County is one of seven counties statewide where more than half its homes are worth more than $100,000.

The House plan would remove the city, county and school operating costs from owner-occupied homes, leaving only local debt on tax bills. That would cut the average bill by 85 percent, no matter how high the home's value. But even a 2-cent sales tax increase leaves the plan out of balance.

"The House formula is dramatically flawed. There's virtually nothing in that that works," said Sen. Scott Richardson, R-Hilton Head Island, who created the Senate plan. "There is no perfect formula that fits 46 counties. The more we knew, the more difficult it became to do that. ... Let's start with something, at least at a place that makes sense."

The Senate will continue the debate Wednesday.

"We're just churning the water today," McConnell said after the Senate adjourned. "There's a feeling we've got to do something but there's no consensus as to what."

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