Property tax relief gets new attention

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With another reassessment looming, Edgar Hicks of Greenville would like to see the tax burden shift to sales.

"No matter who you are, everybody's going to buy something, and they have to pay sales tax," Hicks said.

A plan to replace property taxes with higher sales taxes is one of many Upstate legislators have proposed. They've joined lawmakers statewide in filing all sorts of bills to tinker with property taxes, which are the primary source of money for local governments but are regulated by state law.

Rep. Fletcher Smith, a Greenville Democrat, said the problem with property taxes is they seem to keep climbing, making it difficult for residents to budget for them and hold onto their homes.

"It's not fair to tax you to such an extent that you won't be able to pay for it when you're a senior citizen and you're on a fixed income," he said.

Rep. Ronald Townsend, R-Anderson, said it's hard to get everyone to agree on one plan.

"There's so many floating around out there," he said.

Townsend is sponsoring a bill to freeze a home's value at the current level until it is sold, a measure approved by a House subcommittee this week. That bill passed in the House of Representatives last year but didn't make it through the Senate.

Some lawmakers blame the lack of progress on resistance to large-scale change.

"It's too drastic a change in our system to make it work," said Sen. Verne Smith, R-Greer. "It's over-simplifying the problem just to say, 'Do away with the property tax.'"

Not so, according to Sen. David Thomas, R-Greenville, who favors replacing the property tax with a higher sales tax. But Thomas agrees that movement on the issue is slow because people are used to the current system.

"It's such a big concept," Thomas said. "What I don't think many local governments are willing to recognize, statewide, is how dramatically the ground is shifting. It is such a change, as far as percentage of income goes, that is going to pay (property) taxes."

The idea behind reassessment is to make sure people are taxed on up-to-date property values. Over time, many properties rise in value while some depreciate. Five-year reassessments are designed to make sure all owners are paying their fair share.

Greenville County's last scheduled reassessment was in 2000, but the county delayed it for one year. Reassessing again this year gets the county back on track.

Local governments must lower tax rates in reassessment years so they don't collect a windfall of new money. In theory, they should get about the same amount as the previous year. But dramatic increases in home values mean some people still see higher tax bills.

Rep. Lewis Vaughn, R-Greenville, said property tax reform measures would get more backing if every county reassessed properties in the same year.

"You only have nine or so counties reassess each year," Vaughn said. "If you had them reassessed the same year, you'd have a groundswell of support to get these things passed."

Thomas has filed one bill that would add 2 percent to the state's 5 percent sales tax to eliminate most property taxes on homes and cars. He said he's also working on a plan to replace property taxes altogether, though he wouldn't give details yet on how it would work.

To Sarah Helgemo, who recently moved to Taylors from Florida, taxes in Greenville County aren't so bad compared to other places. Lower cost of living was one reason she moved here. The amount she pays monthly on her mortgage for property taxes are about a third of what she paid before, she said, though her home is about the same size.

"I'm thrilled to pay the $100," Helgemo said. "It was about $300 a month in Florida."

She also doesn't mind the tax because she knows much of it is going toward local schools.

"It's for the children, it's for their schooling," she said. "I'm not going to complain about it."

The General Assembly did pass a measure last year to limit increases in property value to 20 percent, but Gov. Mark Sanford vetoed it.

Sanford, in a Dec. 17 letter to House Speaker David Wilkins, said, "Although I believe this bill is a well-intentioned effort to reduce property tax burdens for certain residents who have seen dramatic increases in property values, unfortunately, it is also flawed by constitutional problems and significant shifts of distribution of state education funding." Property tax politicsProperty taxes have become a political football in Greenville County, tossed back and forth between local officials and state lawmakers. During the last reassessment in 2001, when 89 percent of property owners saw higher tax bills, county officials pointed to state legislators, saying they wrote the laws governing reassessment.

Judy Gilstrap, chair of Greenville County Council's Finance Committee, and Council Chairman Butch Kirven have said they have no plans to raise taxes this year in the midst of reassessment.

"We're not trying to gouge our citizens," Gilstrap said. "When we're told to do a reassessment, that's what we're doing. We're looking at the property in the present value."

She pointed out that property values will rise on the market no matter how they're taxed, and people can benefit from that increase if they sell their homes.

According to the South Carolina Association of Counties, the tendency to blame county governments for higher taxes largely misses the target. In general, the majority of property taxes go for school operations, said Kathy Williams, assistant director of the county association.

Local school districts increasingly need more money from property taxes to make up for cuts at the state level, she said in a recent interview.

"I think until there is a concerted effort to sit down and study the whole taxation issue, not just a component, the whole issue — particularly school funding, which is at the source of property tax — there is no solution," Williams said. Desperate for change

Lawmakers say they hope some form of property tax reform will pass this year, but it may take longer. Some are desperate for change.

Vaughn said he voted for last year's 20 percent cap on property value increases, but not because he thought it was the best policy. In fact, he didn't like the bill, because he said it could've meant higher tax bills for those who are less able to pay them while giving owners of high-valued properties a break.

"I think I voted for that just out of frustration because we couldn't get things done with property tax relief," Vaughn said.

Vaughn said Townsend's bill to freeze home values has a good shot at passing again this year in the House. Winning the Senate's approval is the key, he said.

Among the many property tax-related bills in the Legislature this year is one that would allow counties to set up monthly payment plans for property taxes. Some people build the money into their mortgage payments, but others must write a check all at once in January.

Townsend said that plan has the wrong idea.

"That's the worst thing we could do," he said, "because then people lose concept of how much taxes are being put on them."