It's likely that House members facing elections in November will approve recommendations on reassessment reform and possibly replacing some portion of property taxes with a 2-cent sales tax.
But members of the Senate Finance Committee said last week that action on property tax relief will be slow moving and reassessment reform may be the lone issue that makes it to a voter referendum in November.
State law mandates reassessments every five years, a system that isn't contentious as long as property values remain static or show a standard growth over the years. But the state's coastal counties are seeing exploding home costs driving up property values and subsequent tax bills.
The House proposal focuses on point-of-sale reassessment, leaving property values unchanged, aside from an allowance for inflation, until a house is sold or substantially improved.
"There's arguments for and against most of these proposals, but that's one that's probably got universal acceptance in the House and the Senate," said Rep. Richard Chalk, R-Hilton Head Island.
Supporters say the change would protect longtime homeowners who don't plan on moving, therefore never realizing the growing value of their property.
"Our seniors and families that have lived in the same homes for generations are having problems paying the taxes," said Rep. Catherine Ceips, R-Beaufort.
The Senate version provides options beyond point-of-sale, noting spiking property values aren't a statewide issue. Although he can recognize the appeal for the point-of-sale reassessment on the coast, Sen. Vincent Sheheen, D-Camden, said the measure has its drawbacks.
"It punishes new homeowners who will see their (tax rate) increase to make up the difference," he said.
In the Senate bill, counties would be allowed to pick their reassessment tool from a menu, allowing the point-of-sale method, a cap on reassessment or a program similar to the existing system, but expedited to an annual process instead of every five years.
Reassessment may be the issue that spawned reform talks, but the results have been monopolized by discussion of sweeping, broader tax reform. Although the Senate and the House have gone off on separate tracks to find a solution to property tax woes, both see the alternate funding needed for sustainable tax relief through raising the state sales tax from 5 cents to 7 cents.
But a funding source alone won't secure approval from legislators concerned about the stability of sales tax revenue growth as well as no concrete plans for how the money would be distributed.
Complicating any resolution is the difference in how legislators plan to spend this proposed new source of revenue.
The House is proposing the sales tax replace property taxes on owner-occupied homes for the operating costs of schools, counties, municipalities and public service districts.
"I like the concept that you can own your home and don't owe the government anything," Ceips said, noting she'll still have to see the ramifications of the bill.
Property tax solutions in the past have provided only short-term relief as advances in reducing taxes from one governing body are later enveloped by another, said House Speaker Bobby Harrell.
"I'm afraid if you don't completely wipe out the tax, it's going to rear its ugly head again," he said Thursday.
But detractors in the General Assembly say the House proposal reaches too far. Making the state responsible for various local governments would be a logistic nightmare, said Jim Ritchie Jr., R-Spartanburg. "It would be easy to go home and campaign on the (House) plan, but it would be difficult to govern on that plan," he said.
The Senate proposal would include property beyond owner-occupied homes and cover only school operating costs with the new sales tax revenue, putting the rest into an emergency reserve account in case of a disaster like Hurricane Katrina that could cripple sales tax collections.
"The course we're following in the Senate is to build consensus," said Senate leader Glenn McConnell, R-Charleston.
Both proposals seek to provide broader benefits to residents that don't own property. Expectations are that any sales tax hike would include the elimination of the sales tax on groceries and potentially hotels.
While the plans would include some type of income tax credit for residents that don't own their home, that would provide little aid because those people don't often itemize their taxes, said Ritchie.
"Tax credits to renters won't show any value to the people you want it to get to," he said.