Supreme Court says reassessment cap unconstitutional

COLUMBIA, S.C. - The South Carolina Supreme Court says a state law letting counties impose a limit on how much property values can increase for tax purposes is unconstitutional.

The court released its ruling Monday in a case from Charleston in which the county had tried to put a 15 percent limit on increases in assessed property values.

The court did not address whether reassessment caps can be imposed, but ruled that any law governing property taxes had to be imposed evenly across the state. The law allowed each county to decide whether to impose the cap.

Attorney J. Brady Hair, who argued against the ordinance, said the ruling addressed his first, and simplest point, that the cap was unconstitutional. The justices "didn't have to go into the more complicated issues," he said.

Both Hair and Dawes Cooke, who represented Charleston County in the case, said the court left unanswered whether the state can impose a limit on how much property values can increase during reassessments.

A bill to limit increases to 20 percent passed the House and Senate last year, but was vetoed by Gov. Mark Sanford.

Property values are reassessed every five years to reflect changes in fair market value. Once a county determines the value of all its property, it sets a tax rate. A cap helps people whose property values are increasing rapidly. But, Hair said, it hurts others in the same county who see higher tax rates to make up for the below-market values.

The city of North Charleston challenged the 15 percent cap Charleston County proposed because it would have "adversely affected 90 percent of our residents," Hair said.

This cap was never imposed, Cooke said, so no property owners were affected. Cooke said he didn't know if the county wanted to ask the court to reconsider its ruling.

An earlier attempt by Charleston County Council to put a cap on property value increases only for owner-occupied homes also was struck down by the state Supreme Court. In that case, the court said the county gave a special exemption to owner-occupied homes not allowed by state law.

The county was ordered to refund millions of dollars it overcharged in property taxes in 2001.