COLUMBIA, S.C. - An attempt to raise the state
sales tax to generate about $200 million for public schools died in
the Senate Tuesday as it was ruled out of order.
The plan came up for discussion at the end of the fourth day of
debate mired in amendments offered by Democrats as a way to force a
tax increase. But Republicans rebuffed the ideas, saying there was
no sure source of money to pay for them.
Along the way, objections to debate quashed every effort to bring
up sales tax increase proposals. That changed just after 7 p.m. when
nearly 20 Republican and Democratic senators spent a few minutes
caucusing on the floor. It was the first time the two sides had come
together in a week to agree any key points in the $5.2 billion
budget debate.
When they broke up, they allowed Sen. David Thomas, R-Fountain
Inn, to pitch his proposal to raise $1 billion by increasing the
state sales tax to 7 percent from 5 percent.
The money would be used to eliminate nearly 95 percent of local
government taxes on cars and homes and generate $200 million for
schools. State Education Department figures show that without $326
million in the 2003-2004 budget, schools could face laying off as
many as 6,600 teachers.
Thomas said it would unshackle counties from property taxes and
force tax collections from people who don't pay property taxes,
particularly illegal immigrants. With an estimated 200,000 illegal
immigrants in the state, a sales tax is "the only way you can catch
them" in the tax system, he said.
And if it doesn't work, the sales tax would return to 5 percent
next year and local governments would be able to return to the
property tax, he said.
"It's almost like a test drive," Thomas said.
But the plan didn't get far. Senate President Pro Tem Glenn
McConnell, R-Charleston, and a master of Senate rules, asked Lt.
Gov. Andre Bauer to rule the plan out of order because it altered
permanent law. Senate rules say permanent law can't be changed in
the state budget.
"It's a whopping $200 million tax increase," McConnell said,
adding that it still would leave the 2004-2005 budget $200 million
short.
Sen. Ralph Anderson, D-Greenville, said Thomas's proposal would
force poor people to pay more when they go to stores and they may
not own property that benefits from breaks. "You'll be taking from
the poor and giving to the rich," he said.
There are other tax proposals, particularly one from Sen. Tommy
Moore, D-Clearwater. His plan increases the sales tax to 7 percent,
but gives less back in the way of tax breaks. More money goes into
schools, colleges and state agencies.
The question now is whether tax increase proposals are dead.
"I hope not," Moore said. There's been too much emphasis on tax
increases being neutral, or balanced with tax cuts and "we're
getting nowhere in neutral," he said.
But Senate Finance Committee Chairman Hugh Leatherman says sales
tax increases don't appear likely to pass in the budget.
They "appear to be totally dead. I don't see any sales tax,"
Leatherman said. The same is true for plans to eliminate a handful
of sales tax exemptions, he said.
There's a likelihood still of a cigarette tax increase of up to
53 cents a pack from 7 cents. But that issue will be dealt with in a
separate bill because it needs to be part of permanent law,
Leatherman said.
Leatherman said the getting the sales tax up for debate broke the
logjam. He expects the pace on a budget bill, which is about two
weeks behind schedule, to quicken now.
Delays have made it likely that the Legislature will have to come
back for an extended session to at least deal with budget vetoes
after it adjourns June
5.