Sanford cautions Senate on sales tax increase

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Republicans and Democrats in the Senate have toyed with competing plans to increase the sales tax but disagree on how to spend the money.

Sen. David Thomas, a Greenville Republican who authored one of the plans, has proposed using the new revenue to eliminate property taxes on owner-occupied homes and on personal vehicles, with $200 million more earmarked for education.

Sanford said Wednesday he told Thomas that such a plan could shift more of the tax burden to commercial property, adding to the financial woes of businesses already struggling through a sour economy.

"I would not want to see something that shifted the tax burden to business," he said. "I think it would hurt our ability to grow jobs and the economy and build wealth, all of which are vital to creating a greater revenue stream that goes to pay for education, infrastructure, etc."

Sanford has proposed a plan that would couple a hike in cigarette taxes with a decrease over 15 years in the state's income tax. The House has rejected the cigarette tax increase and senators have cooled recently to the proposal.

The governor gathered reporters to his office Wednesday to repeat his legislative priorities, which include his tax plan, education initiatives and a state government restructuring proposal that would change some constitutional officers to appointed jobs.

Sanford compared the legislative session to a ballgame, saying lawmakers are nearing halftime with many proposals still being debated.

"There are a lot of basketballs on the court right now," he said.

Sanford said he is open to legislative compromise but any tax plan must result in a net decrease of taxes. He warned that a failure to support such a plan would result in money being taken from education and other areas to pay the state's Medicaid bill.

Despite the governor's stated commitment to tax swaps that produce a net decrease, the Senate debated the 2-cent sales tax increase Wednesday, which would swell state tax coffers by more than $1 billion. They have not adopted any plan yet, because they cannot agree on how to spend it.

On a preliminary vote, the Senate supported by a one-vote margin setting education spending at the Education Finance Act formula level of $2,201 per student. The House budget set EFA funding at $1,643 per pupil. But after further debate, the Senate killed the education funding amendment by a one-vote margin.

Sen. Tommy Moore, D-Clearwater, promised the vote would be a "litmus test" in next year's elections on who has supported education and who has not.

Sen. Hugh Leatherman, R-Florence, who chairs the Senate Finance Committee, said such a tactic was disingenuous and he remains committed to increasing education funding.

Leatherman voted against the $2,201 per-pupil spending.

Sanford lauded Greenville School District Superintendent Bill Harner for announcing Tuesday he would cut five assistant superintendent positions and reorganize the district's governing structure to save $2.6 million of the district's $28 million estimated budget shortfall.

"He said, rather than starting with teachers and the classroom, let's begin with administration," Sanford said. "I would commend what he did in terms of leadership."

Sanford said while money is important to education plans, overhaul of the system is "essential." Sanford is proposing a plan that would give local districts more flexibility on how they spend their money.

Sanford declined to support a specific per-pupil funding figure, saying that the final number "is going to be south of where everybody probably would like it to be."