By Stephanie Tracy Anderson Independent-Mail
March 5, 2006

While the state House of Representatives continues to cobble together a three-part budget bill, the state Senate is still tossing around solutions to the problem of rising property taxes.

The breadth of some of those proposed solutions has some Upstate lawmakers balking.

Late last week, a Senate subcommittee began discussions on two proposals to provide property tax relief. The first plan would eliminate school operations taxes on owner-occupied homes and vehicles.

The second, and much broader, plan would eliminate school operations taxes on all classes of property. The revenue would be replaced with a 2-cent increase in the sales tax, and by eliminating all sales tax exemptions except those for prescription drugs and federally mandated exemptions.

The subcommittee is scheduled to continue discussions on the two proposals this week.

"One option would be to deal with the exemptions, but I think if we start doing that in the confines of property tax reform, we're looking at a recipe for nothing to get done," said Sen. Thomas Alexander, R-Walhalla, one of a handful of senators last fall who studied ways to change the state's property tax system.

Sen. Alexander said such a strategy would only energize special interest groups intent on keeping the exemptions, and give "them ammunition to fight any reform."

Both the House and the Senate have approved constitutional amendments to change the way property values are assessed, and the way local governments levy taxes. Those amendments will likely go before the voters in November. But the two chambers still differ on a plan to swap property taxes for sales taxes.

Senators have generally been more supportive of proposals to fund school operations at a state level, as opposed to the House plan that would give the state control over funding for both schools and local governments.

Sen. Larry Martin, R-Pickens, said he would be more likely to support the more conservative Senate plan.

"The underlying motive under the second (plan) is to tremendously increase school funding across the board," he said. "But I don't believe for one minute that people will buy a $900 million to $1 billion tax increase to do it."

Rep. Michael Thompson, R-Anderson, said he found the Senate's latest proposal "awfully interesting" after some senators criticized the House property tax bill as a behemoth that tried to do too much at once.

He said he would support more state funding for local school districts, but said "the formulas that each respective body comes up with have to actually work."

"I would like to see the reassessment formula addressed," Rep. Thompson said. "I would certainly like to see the property taxes on owner-occupied residences eliminated. I think that's the end goal for everybody."

Rep. Ronny Townsend, R-Anderson, said when this legislative session ends, he would be content to have passed legislation reducing property taxes.

"And if it's just the school property taxes, I'm happy with that," he said. "If we leave and we don't do that, then I think we've done an injustice to the entire debate we've had."

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