| Income tax cut would help state, small business, governor
says AIKEN - The field of economic plans aimed at ending the state's budget woes is getting crowded, but South Carolina Gov. Mark Sanford said Thursday that he won't back away from cutting income taxes. "I just spent two years of my life talking to folks ... on what it would do for small-business creation and job growth in our state," Mr. Sanford said in a telephone interview. "I've got to deliver on that promise in some form or some fashion." Since Mr. Sanford publicized his plan last month and toured the state touting it, at least three other lawmakers have come forward with alternative proposals as the Legislature prepares to convene the second week in January. Most notable among them is a scheme put out this week by state Rep. Bobby Harrell, R-Charleston, who serves as chairman of the House Ways and Means committee. He said he wants to increase the state's sales tax by a penny in hopes of eventually ending the car tax and limiting future property tax increases. Like two other legislative proposals, Mr. Harrell's plan focuses on property tax relief and doesn't address the income tax. If the governor wants his own proposal to pass, he needs the help of Mr. Harrell, a powerful fellow Republican who steers debate in the House on budgetary issues. Mr. Sanford's proposal would drop the income tax from 7 to 5.9 percent. To pay for this cut, the governor wants to raise the state's cigarette tax by 61 cents and apply a 5 percent sales tax to lottery to make up for the lost revenue. The governor contends that dropping the income tax would bolster small business and make the state more attractive to new business. Mr. Harrell said he "loves the idea of reducing the income tax," but is hesitant to raise the cigarette tax to the national average. The jump would send smokers in South Carolina's border cities, such as North Augusta, to Georgia where the tax is less than 40 cents. "The governor's plan isn't incompatible with what I'm talking about," Mr. Harrell said. "If (he) would like to talk about a lower figure, I think people in the General Assembly would be willing to talk to him about it." The governor is realistic. With the state facing budget cuts estimated as high as $500 million, he knows many legislators are hesitant to pass a revenue-neutral plan such as his. "These budget times may make it impossible to (drop the income tax) to the full extent of what I talked about, but at some level I've got to deliver on that promise," he said. Reach Josh Gelinas at (803) 279-6895 or josh.gelinas@augustachronicle.com.
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