Posted on Thu, Apr. 20, 2006

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Senate continues debate on property taxes

SEANNA ADCOX

Associated Press

COLUMBIA, S.C. - The Senate adjourned Thursday without reaching an agreement on how to give homeowners property tax relief.

In their sixth day of floor debate on the issue, senators finally approved a template to work from. But they still are far from agreement.

Following a Senate huddle Thursday evening, President Pro Tem Glenn McConnell, R-Charleston, took the podium to postpone the debate. The Senate will take up the budget next week and return to property taxes May 2.

The extra time will allow proponents of competing plans to thoroughly research the details and "build a broader base of support," McConnell said. "We will thoroughly hash out the issue and reach some sort of consensus."

Sen. Greg Ryberg disagreed with adjourning. He said the Senate needs to wrap up the property tax debate before moving on to the budget, because it may need to include money for property tax relief.

"I think we lose our leverage when we move behind the budget," said Ryberg, R-Aiken.

McConnell disagreed. "It's not on the back seat. It's on the front seat," he said.

Earlier Thursday, senators passed a plan that would let voters decide on a county-by-county basis whether they want to reduce their property taxes by increasing their local sales tax. The vote filled in a so-called "skeleton bill" and gave the Senate a foundation to work from.

"We've got to adopt a framework. Otherwise, we're still just wandering in the desert," said Sen. Jim Ritchie, R-Spartanburg.

The framework is a scaled-down version of a plan proposed Wednesday by Sen. Chip Campsen, R-Isle of Palms.

It would allow counties to raise local sales taxes to remove the school operating costs from owner-occupied homes, business vehicles and property such as airplanes and boats - but not personal vehicles.

That would cut homeowners' tax bills in half. The local sales tax increase would not apply to groceries.

The plan no longer includes a statewide, quarter-cent sales tax increase that would give businesses a tax credit and cap how much of their income residents spend on property taxes.

Following the vote, senators immediately moved on to other proposals. Many still want a statewide property tax plan.

Sen. Jake Knotts, R-West Columbia, again put up a plan similar to what the House approved in February. The House tax-swap plan would cut the tax bills on owner-occupied homes by 85 percent and increase the state sales tax by 2 cents, to 7 cents, but eliminate the sales tax on groceries.

Most senators immediately blasted that plan as bad for businesses and out of balance. The plan would cost the state nearly $117 million the first year.

The version Knotts proposed Thursday tacked on additional relief to businesses. He did not know how much the plan would cost.

Sen. Larry Martin, R-Pickens, said without additional revenue, the plan would likely end up hundreds of millions of dollars out of balance.

The Senate refused to kill the proposal but did not vote to approve it. The plan will be among those debated the week of May 2.