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Article published Nov 5, 2004
Lawmakers should make a serious attempt toward state tax system restructuring

Voters in Spartanburg County decisively defeated the local option sales tax in Tuesday's election.By a substantial margin, they decided that they did not want to pay a higher sales tax in return for a lower property tax. There were justifiable reasons to vote on either side of the question, and voters were not unreasonable in turning it down.But the failure of the proposal means that towns, cities and the county are still left to depend solely on the property tax for their revenue. And there are projects that the county and municipalities need to fund.In order to keep the county budget down and refrain from raising taxes, the county has deferred maintenance on county roads and replacement of vehicles. Those costs can be postponed but not permanently avoided. Eventually, those bills will have to be paid.City officials also say they will go ahead and pursue their project to resume control of city parks.The only option available to them is private fund raising and higher property taxes.The situation shows the need for the General Assembly to redesign the state's tax system.Lawmakers have tinkered with the system over the past couple of decades, passing small measures of tax relief, piecemeal fixes designed to gain political support. They have also passed numerous tax credits aimed to spur economic development.But these small measures accumulate. They weren't considered together. Lawmakers didn't sit down and determine how the aggregate number of tax measures would affect the entire state tax system. But overall, they have led to a shift in the tax burden toward homeowners and small businesses.The state's tax system is overly complex and not equitable. The entire burden of local government, as well as half the burden of financing the schools, falls on the property tax.State leaders need to look at the entire tax system, the way South Carolina generates revenue for all levels of government and schools. Lawmakers need to devise a new system that is simple and fair. It also needs to allow local governments more flexibility in how they raise revenue and more independence for local governments and school districts.Small piecemeal fixes haven't worked. A comprehensive redesign is needed. And lawmakers need to start on it right away.