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Article published Dec 11, 2003
House budget chairman pushes for sales tax increase, car tax
elimination
JIM DAVENPORT
Associated
Press
COLUMBIA -- The chairman of the powerful House Ways and
Means Committee says increasing the state's sales tax by a penny on the dollar
and eliminating some exemptions from that levy would generate enough money to
end car taxes and limit future home tax increases.Rep. Bobby Harrell,
R-Charleston, says a bill he is lining up sponsors for also calls for reducing
overhead spending on the state lottery and making ticket sales subject to the
state's sales tax.The changes would bring a new source of support to state
schools, Harrell said. While eliminating car taxes for residents, the proposal
also sends more money to public schools from tourists."For the South Carolina
people this is a tax cut, but we will be allowing tourists to participate in our
schools -- up to about $73 million," Harrell said."I think we're all trying to
find an answer to the public's complaint about property taxes," Harrell said."I
think ultimately we'll all work together on something."Harrell says his plan
generates about $513 million by raising the sales tax. Eliminating seven
exemptions generates almost $43 million, with nearly $34 million coming from
lottery tickets and almost $5 million from eliminating a sales tax holiday held
each August. Cutting lottery overhead to 6 percent of sales instead of 8 percent
would generate $14 million, Harrell said.Harrell puts most of the money into
eliminating car taxes over three years, with $461 million in the first year
going to replace money schools would lose.Harrell's measure eliminates property
tax reassessments. "We don't do reassessment anymore on real property and that's
where I hear the biggest complaint -- after reassessment occurs," Harrell said.
Doing away with reassessments would prompt elimination of county tax assessor
operations and save local governments $29 million.Taxes on homes would still go
up. His measure doesn't address rising costs of school operations tacked onto
tax bills. Higher values in homes would be reflected when homes are sold. New
owners would pay the new, higher assessed value of the home, Harrell
said.Limiting local governments' ability to raise taxes poses a big challenge
for the plans. Harrell's plan requires a two-thirds vote in the House and Senate
and could become effective in January 2005, he said. The two other measures
require two-thirds votes to show up as a referendum on November 2004 ballots,
but would require legislative action in 2005 to become law.