Business leaders Thursday called for reform of South Carolina's tax structure, but they stressed property tax relief must be measured until its long-term impact on the state's economic health can be determined.

Without comprehensive tax reform, state residents risk falling behind in a globally competitive environment, the business leaders said. The penalty would be wasted economic opportunities and lost jobs, they said.

"We need to look at the whole comprehensiveness of what's going on with taxes," said Mack Whittle, president and chief executive officer of The South Financial Group Inc., parent company of Carolina First Bank, and past chairman of the South Carolina Chamber of Commerce.

"Let's don't just do something just emotionally with property taxes," he said. "If that's what needs to change, then let's understand what the impact is two years and three years and four years down the road."

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Whittle was among business leaders who met with reporters and editors of The Greenville News to outline the state Chamber of Commerce's 2006 Competitiveness Agenda -- the pro- business group's priorities for the new legislative session, which begins next week.

Other initiatives, the business leaders said, include reforming the state's workers' compensation insurance system, encouraging economic development, expanding South Carolina's ports; ensuring funding and accountability for education, addressing highway needs, and examining health-care costs.

In this election year, business leaders such as Whittle and Emerson Gower Jr., vice president of Progress Energy, say Gov. Mark Sanford and state lawmakers must help solve the most pressing economic, educational, health-care and public-safety problems. Gower is chairman of the state Chamber.

A huge concern, however, is that many state lawmakers this year hope to lower property taxes and increase sales taxes -- a move critics fear will benefit the wealthy while placing a much higher tax burden on the poor.

Business leaders said such a move could be risky. While they believe companies pay an inordinate amount of property taxes, shifting more of the tax burden to a sales tax moves the state to a more volatile funding mechanism that could threaten government revenues and the state's economic competitiveness, they said.

"The sales tax is the most volatile; property tax is the most stable" source of government funding, said S. Hunter Howard Jr., the state Chamber's president and chief executive officer. "And you're moving from the most stable to the most volatile."

The business leaders believe homeowners have legitimate concerns about the way their properties are taxed and about the burden reassessment often places on those least able to afford it. And they acknowledge that at hearings across the state, the public has said it clearly is in favor of changes that include residential property tax relief.

Still, research shows the state's overall tax burden per taxpayer compares favorably with other states and is 5 percent to 8 percent below the national average as a percentage of personal income, state Chamber officials said. Based on residential property tax alone, South Carolina ranks in the middle -- 23rd -- nationwide, Whittle said.

The exceptions are manufacturing and commercial property taxes, which are among the highest in the country, Chamber officials said. South Carolina now has the highest tax on industrial property and the eighth highest tax on commercial property in the nation, the Chamber says.

In all, "we're not overtaxed in South Carolina," Whittle said.

But in examining single tax rates, "our taxes are higher than they are in other places," he said.

Whittle said an independent commission should be formed to examine the long-term impact of tax relief. Until then, he said, the state should adopt a "circuit breaker" concept that targets property-tax relief for those who need it most.

The Chamber supports a 1 percent increase in the sales tax to finance income-based circuit breakers for renters and residential property owners. In addition, the state should provide a program allowing all other classes of property owners who don't qualify for circuit breakers to defer their tax debt until the property changes hands, Chamber officials said.

"Hopefully, there are some Band-Aids they (state lawmakers) can put on this thing and solve it in ways other states have solved it temporarily and then we can move forward with creating this commission," Whittle said.

Meanwhile, the Senate Judiciary Committee on Wednesday unanimously passed three pieces of property tax reform, the Associated Press reported.

One bill would make so-called point-of-sale reassessment the default system statewide. Under that method, property would be reassessed only when sold, inherited or substantially improved. But the amendment allows counties to choose from other reassessment options provided by the General Assembly -- which some tax groups oppose.

Another proposal would cap local tax rates. Increases would be limited to the state's personal income growth except in specified situations. Local governments could get more money through a public vote.

A third amendment would require that if governments must raise taxes due to a debt from the previous year, a court order, or a "catastrophic event," such as a natural disaster or terrorist attack, then tax bills must list those amounts separately.

The bills discussed Wednesday don't address legislators' ideas to cut property taxes by increasing the state sales tax. The state constitution requires that any legislation that affects state revenue come from the House.