Legislature makes little progress to save teachers' jobs

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No leader — including the governor — has emerged with a plan that has attracted a clear consensus.

The Senate Finance Committee approved an eight-fold increase in sales taxes on cars, lifted a sales tax exemption on manufacturers' equipment, and voided a 1-cent sales tax exemption for people older than 85. The resulting $151 million would have been earmarked for the Education Finance Act, which pays teacher salaries.

But that plan was declared dead by one of its authors Wednesday, as competing plans circulated among Senate members.

"What we did is not going to fly," said Sen. Verne Smith, R-Greer, who with Senate Finance Committee Chairman Hugh Leatherman, R-Florence, and other subcommittee chairman had crafted the sales tax increases for education.

Other senators said there was little agreement on how to raise education funding above the House-passed $1,634 per student, which would reduce the base student cost under the Education Finance Act to levels not seen in a decade. The Senate Finance Committee plan would have raised spending to $1,904 per student.

Key to the Finance Committee's plan to raise $322 million in new revenue would be to raise the sales tax cap on the purchase of vehicles to $2,500.

The current $300 cap means only the first $6,000 of a vehicle's value is taxed at sale. The proposed higher limit would be taxed up to a value of $50,000.

The Senate Finance Committee also proposed a 53-cent per pack increase in taxes on cigarettes to raise $171 million for Medicaid, the state-federal partnership that provides health care for the poor and elderly.

"The way we generate those funds is not as much a concern to me as making sure we do it," Leatherman said.

Gov. Mark Sanford has offered to support the cigarette tax increase in exchange for legislative support for his plan to reduce the top state income tax rate to 5 percent from 7 percent.

Sanford said that if the Legislature chooses not to enact his plan, "then we've just said goodbye to the overall theme of tax reform."

Two other tax plans are circulating among lawmakers, and receiving some support.

Sen. David Thomas, R-Fountain Inn, plans to propose increasing the state sales tax to 7 cents from the current 5 cents per dollar. He would use the approximately $1 billion of new revenue to replace property taxes on homes and vehicles.

Thomas said it would result in a net windfall for school districts, especially the poor, rural districts.

Meanwhile, Sen. Tommy Moore, D-Clearwater, plans to propose a 2-cent sales tax increase and the 53-cent cigarette tax increase and use most of the new money for education ($409 million) and health care ($262 million).

Moore's plan also calls for an income tax reduction, to 5 percent from 7 percent, on small-business owners, and eliminating taxes on the first $15,000 of personal income.

"It's one thing to say no tax increase, but when you are just shifting that burden to local taxpayers, that's not fair," Moore said.

Wallace Brown, executive director of the Richland County Health Care Association, Inc. of Columbia, said he likes Sanford's proposal because it cuts taxes and helps Medicaid.

"He has a plan that will help the state's revenue and at the same time help increase revenue for individual homes and stabilize the Medicaid program for over a half million people," he said.

"We're focused on the Senate right now and then we'll come back to the House and see what happens," he said.

The House did not include the cigarette tax increase, a measure vigorously opposed by House Speaker David Wilkins, R-Greenville, and House Ways and Means Committee Chairman Bobby Harrell, R-Charleston.