What's your view? Click here to add your comment to this story.

This state's elected officials -- and those starry-eyed candidates seeking office -- should take to heart a cautionary note in the recent Standard & Poor's credit rating report. While politicians undoubtedly can win votes by supporting a hastily approved tax swap and promising to cut property taxes even more, they could be doing so at the expense of this state's financial reputation.

All those politicians yammering about eliminating property taxes and replacing them with an even higher sales tax should read the recent Standard & Poor's report. It has this yellow light for elected officials recklessly rushing to eliminate property taxes: "There is some concern because sales tax revenues are also economically sensitive and would likely decline during an economic downturn, therefore the state's general fund could be stressed while school districts could also be affected." Standard & Poor's, which last year dropped the state's credit rating from AAA to AA+, last week affirmed the state's AA+ rating and gave the state a "stable" outlook.

Despite a number of corrective measures taken by the state Legislature to shore up the state's reserve funds and adopt a healthier approach to the state budget, Standard & Poor's didn't see fit to reward the state with an upgrade to the top AAA rating.

South Carolina has been through tough financial times -- like much of the nation. But this state, which has been so heavily dependent on manufacturing, is having a more modest economic recovery than states with a more diversified economy. As Standard & Poor's put it, South Carolina has an "improving, but still lagging, economic condition." To their credit, state officials have adopted stronger budget practices that helped make a good impression on credit rating agencies.

Advertisement

Still, South Carolina is fighting a stubborn unemployment rate. An overarching goal must be to replace lost manufacturing jobs with those that offer workers a solid income and higher standard of living. Achieving this should be what candidates seeking office this fall are discussing.

Instead, most of them are talking thoughtlessly about more property tax cuts. They want to replace that more stable revenue that goes for local services with a sales tax that is vulnerable to an economic downturn. Doing so will surely win votes with people who detest the property tax, but such action could prove to be a costly mistake.