The South Carolina Senate has been debating property tax relief for the last month, and after taking the last week to deal with the budget, it will begin to do so again this week. The most common theme throughout the entire Senate debate is that there is no clear consensus as to (1) if property tax relief is really needed and (2) if it is needed, how to best deliver the relief to those who truly need it.

Before discussing what the business community believes the state should do about property tax relief, let's review what has transpired throughout the legislative process.

The S.C. House of Representatives passed a plan that would raise the state sales tax from 5 cents to 7 cents per dollar. The additional 2 cents, which would generate an additional $1.2 billion for the state, would be used to pay for residential homeowners' portion of property tax that is allocated to school operating funds (about 65 percent of a residential homeowner's total property tax bill).

Looking at this plan on the surface, it seems like a great idea. Consumers and homeowners can control what they consume more than that of property taxes imposed upon them by local governments. Additionally, assuming I own a $150,000 home, this plan would save me approximately $81 per month on my escrowed house mortgage payment. Sounds like a great deal so far, right? Let's look a bit deeper into this plan.

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Homeowners are not the only property owners who pay property tax. Business, industry, manufacturers and others pay property taxes, as well. So, under the House plan, businesses would have to pay an additional 2 cents for all the goods and services they purchase. But, the plan has no property tax relief for businesses, essentially giving businesses two choices -- either pass the additional cost through to its customers or absorb the cost.

If business passes through the cost to customers (it would cost S.C. businesses an additional $500 million a year to pay 2 cents more on sales tax), the extra cost would make business less competitive compared to neighboring states (and around the world). Conversely, if the business absorbs the cost, that means it has less money to spend on additional people, raises, benefits and capital investment. With South Carolina's unemployment rate as one of the worst in the nation, that extra cost to business is the last thing it needs.

When that proposal reached the Senate, it seemed that members would not be so drastic in their plan. More reasonable approaches were taken, especially by some of our local senators. Sens. Larry Martin (Pickens) and Jim Ritchie (Spartanburg) have fought tirelessly to take a reasonable approach to property tax relief, by looking at the proposals being introduced and attempting to give business relief, as well. Unfortunately, there are other senators who are trying to pass property tax relief to only residential homeowners, which would further burden business.

What really is occurring in the Senate is a body that is split into many factions -- undecided and unsure as to how to deal with property tax relief. Some senators want a 4-cent sales tax increase, others want a 2-cent increase with the elimination of sales tax exemptions, and others desire the House plan, while there are many who do not want any property tax relief at all.

This lack of a clear consensus among members sends a clear message -- take more time than just this last month of the legislative session to determine what would work best for the stakeholders (business and residents of South Carolina).

The Greenville and Spartanburg Chambers, along with other business groups, are calling for legislators to slow down and take a comprehensive look at the state's entire tax system, including property tax, sales tax and income tax. With efforts to strengthen economic development, create jobs and lower the unemployment rate, South Carolina cannot afford a misstep on this issue.