Plan to cut property taxes moves to full House

By JOHN O’CONNOR

Staff Writer

A key House committee Tuesday approved a wide-ranging plan to eliminate about 85 percent of property taxes on homes in which the owners live.

The plan is nearly identical to one House leaders have been discussing since September, though some members of the Ways and Means Committee were disappointed the bill will not increase education funding in poor or rural school districts.

The plan would increase the sales tax by two cents on the dollar and use the money to pay for school and local government operations now funded through local property taxes.

If the plan kicked in next year, schools and local governments would be funded at current levels and given annual increases equal to their rate of population growth plus inflation.

Committee members proposed 19 amendments Tuesday. The issue sparking the most heated debate was whether to use additional sales tax revenue to boost funding for poor and rural school districts.

“To maintain the status quo is something we felt was unacceptable,” said Rep. Jay Lucas, R-Darlington, a member of the special committee that drafted the plan. “I thought we had an agreement.”

Rep. Gilda Cobb-Hunter, D-Orangeburg, said the House missed an opportunity, especially since the state was sued over its public school funding.

“We’ve done this state a disservice by not doing that,” she said.

Both Lucas and Cobb-Hunter voted in favor of sending the bill to the full House.

The state Education Oversight Committee could recommend a new formula for funding poor districts, said Rep. Bill Cotty, R-Richland, who headed House efforts to draft a plan, and members could address the issue in its budget debate.

“This is property tax reform,” Cotty said. “This is not about equity funding for education.”

The House committee made a handful of changes to the bill, which would cut property tax revenues by nearly $1 billion.

Changes included:

• Moving the start date for the new sales tax to June 2007

• Removing a 6 percent cap on additional money a school or local government could receive

• Creating a separate fund for the tax trust fund

Property tax reform advocates were pleased the committee passed the bill, but some wanted to include school and county bond debt to eliminate property taxes.

“It’s a big win for taxpayers,” said Dan Harvell with NoHomeTax.org, “but it’s not the whole pie.”

The bill will head to the full House for debate next week. The Senate is working on its own proposal, and leaders there have said they do not favor the House approach.

Reach O’Connor at (803) 771-8358 or johnoconnor@thestate.com.

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