Only 27 percent of around 100,000 properties in Beaufort County would save money on 2004 bills compared to their 2003 bills for school and county taxes, the report says. Town taxes are not included in the report.
The legislation, adopted by both the S.C. House of Representatives and Senate, caps increases in property values at 20 percent when properties are reassessed every five years. Beaufort County is scheduled to reassess properties this year, but how and when that actually happens depends on when Gov. Mark Sanford decides if he will sign or veto the bill.
In contrast, the assessor's report shows if Beaufort County property values were reassessed this year as planned, without the 20 percent value cap in place, 68 percent of property owners would see lower bills in 2004 compared to 2003.
The idea that a majority of tax bills would decrease without the cap after property values are reassessed might sound questionable, but the key lies in the tax rate, Assessor Bernice Wright said.
While many property values might indeed increase when reassessed, state law requires the tax rate to be rolled back so the county collects the same amount of money it did the year before. In essence, the tax burden is redistributed.
However, for 68 percent of property owners this year, the tax rate rollback would offset their increase in value, meaning a lower tax bill.
Wright said those numbers are lost on many people who assume the 20 percent cap on value increases means savings for everyone. Only owners of property rising quickly in value will save money, and everyone else will pay extra to make up for it, she said.
"Because it's a cap on values, it doesn't mean that everybody's going to benefit from it," she said. "You have a lot of taxpayers who will be paying more than they should be because some other taxpayers will be paying less than they should be."
But Sen. Scott Richardson, R-Hilton Head Island, who attached the legislation to another bill to push it through in the last days of this year's legislative session, said he doubts Wright's numbers. Regardless, he said, her report misses the intent of the legislation.
"The whole purpose of this tax assessment is to create a fair and predictable tax system, a level people can count on and they know what they're dealing with," Richardson said. "That's what the legislature intended to do."
The S.C. Chamber of Commerce opposes the legislation for the reasons presented in Wright's report, said President Hunter Howard. The chamber is gathering information like Wright's office produced for all counties scheduled for reassessment this year in hopes that the data will convince Sanford to veto the bill.
The legislation is bad for businesses, Howard said, because homes tend to be the properties that rise quickly in value. In general, commercial and manufacturing properties decrease in value over time, unless they are in a prime location.
That means businesses will be among the taxpayers picking up the slack for the high-end properties that get a break, he said.
The state chamber also takes issue with the way the bill was adopted. Howard said bills that change the way taxes are levied must receive a two-thirds majority vote in each house, but the final version of the 20 percent value cap was adopted by voice vote.
If the bill becomes law, the chamber could challenge it on its constitutionality, he said. At issue would be the way it was passed and its conflict with a constitutional requirement that all properties be taxed at their full value.
The latter issue already is the subject of a lawsuit between the city of North Charleston and Charleston County.
Beaufort County officials, still waiting to see if Sanford signs the bill, are not sure whether they will go through with the reassessment this year.
If they move forward with a reassessment that does not include a 20 percent cap on value increases and the governor later signs the bill, officials might have to issue refunds and recalculate taxes. The same scenario would apply if the governor vetoes the bill and lawmakers override it when they reconvene in January.
State law calls for counties to reassess properties every five years and provides the option of delaying the process for one year. County Council already delayed reassessment once last year to consider a local 15 percent value cap, which they later rejected. But S.C. Department of Revenue officials say the law might allow Beaufort County to delay the reassessment a second year given the circumstances.
That scenario is not ideal either, council Chairman Weston Newton said, because it probably would mean higher taxes for everyone. To fund the 2004-05 budget that was planned using updated property values with 1998 values instead, the tax rate would have to be raised to make up the difference.
As another consequence of delaying reassessment another year, local governments and the school district would not have as much borrowing capacity as expected.
Chris Drummond, a spokesman for Sanford's office, said Thursday the governor is reviewing the constitutional issues of the bill, which is a top priority among the 102 bills sent to him by the legislature this year. But the governor has no time frame for when he will make a decision, Drummond said.