(Published June 22‚ 2004)
State lawmakers can't seem to resist tinkering with local taxes. But unless the General Assembly commits to comprehensive reform of the entire tax system, lawmakers should leave well enough alone.
The latest piecemeal change is a bill that would limit how much property values can increase in periodic reassessments. The measure was passed with little public discussion just before the Legislature adjourned this month, and Gov. Mark Sanford hasn't decided yet whether to sign it or veto it. He has until January, when lawmakers return, to make up his mind.
The bill sets a 20 percent cap on increases in property values on homes and businesses for tax purposes. South Carolina counties, especially the nine in the process of reassessing property values, worry that the cap will have a significant impact on local tax collections.
The cap would be good news for property owners with homes that are rapidly appreciating in value. The cap would be especially helpful for homeowners on a fixed income who may have a hard time coming up with the money to pay taxes on a home whose value has skyrocketed simply because of gentrification of the surrounding neighborhood. Without a cap, their only option might be to sell their home and move.
But, by and large, this cap is less an attempt at thoughtful social engineering than an arbitrary tax shift. Why should property owners in hot residential areas get a break simply because their homes have risen in value by more than 20 percent since the last re-evaluation? For example, in Beaufort County, which features some of the state's highest-priced real estate, local officials estimate that 75 percent of the property owners would pay less in taxes with the reassessment cap.
That means, of course, that the tax burden shifts to those with more modest homes. And it also likely would mean increased taxes on cars, boats and business property.
We appreciate the plight of older residents who may have occupied the same home for half a century, only to see it continue to rise in value while their income remains static. But lawmakers should have considered the overall impact of this bill, particularly how it would affect local tax collections.
Instead, this is another situation in which state lawmakers gift-wrap a tax break for one segment of taxpayers while leaving it to local governments to sort out the problems that causes for everyone else. Residents need to wise up and realize a tax shift is not the same as a tax break.
If lawmakers are not willing to undertake across-the-board tax reform, they should quit tinkering around the edges.
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Setting a 20 percent cap on increases in property valuation makes problems for counties. |
| Copyright © 2004 The Herald, South Carolina |