By Tim Smith STAFF WRITER tcsmith@greenvillenews.com
COLUMBIA -- The Senate on Thursday gave tentative approval to a
plan to give counties the option of swapping property tax relief for
an increase in the sales tax.
But the Senate isn't done with the issue yet and agreed to take
it up in another week after dealing with the budget.
Meanwhile, residents such as Jim Storey of Greenville and his
neighbors are paying close attention to the proposals. Storey
recently moved into his new house. He said it seems that a higher
sales tax would work best for homeowners, but he'd also like to know
how much the Senate would raise the tax.
"Obviously, you'd have to do enough to cover the expense, but to
give an accurate figure, I'd have to know how much they are
collecting for property taxes for a year," he said. "If it doubled
the sales tax, that would be a high increase, but you have to offset
the expenses."
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One of the plans the Senate is still considering is a version of
the House plan passed in February that would reduce most homeowners'
taxes and raise the sales tax by two cents on the dollar. The newest
version also would grant a tax break for industrial property.
Senate President Pro Tem Glenn McConnell said afterward that the
Senate appears to want to go further than a local option plan. But
he said with no consensus and procedural mistakes being made,
senators needed to step back from the issue for a while.
Others weren't satisfied to leave.
Sen. Greg Ryberg, an Aiken Republican running for state
treasurer, said proponents of tax relief will lose leverage by
waiting until after the budget. He said now is the best time to pass
a tax relief plan before the Senate decides how to spend the state
budget surplus, which he called a "huge pile of money."
"I would just as soon stay here," he said.
But McConnell disagreed, saying there is no "horn of plenty" for
tax relief and the Senate is placing the issue as a priority once it
completes the budget.
"I don't want the people of South Carolina to think that because
we are going to pass the budget, that we are putting them on the
back seat," he said. "In fact, the Senate has put them on the front
seat."
Senators have considered several plans since last week but were
unable to agree on any of them that involved statewide tax changes.
The debate comes as a property tax reform organization finished
running radio ads with a fictional senator refusing to act on
property reform unless deluged by voter responses.
Thursday's local option plan, a more threadbare version of the
plan proposed Wednesday, would allow voters in each county to decide
whether to swap the removal of school operating taxes from
owner-occupied homes, business equipment and personal property other
than cars, in return for an increase in the sales tax.
The referendum could be triggered by a county council or a
petition from 7 percent of registered voters.
The amount of sales tax increase would vary from county to
county. Food would be exempted from any increased sales taxes.
School boards under the plan would be restricted in raising tax
rates if voters approved a swap.
Wendy Brawley, a Columbia business owner and a school board
member, said she likes the idea of giving communities the power to
decide property tax relief. But she said she has concerns about
limiting what school boards can do.
"There are parts of it that sound better in that at least it
allows some local decision-making," she said. "But it's still very
restrictive of the most important part of increasing the economies
of scale for everybody, and that's a quality education."
Senators proposing the local option idea first offered a plan
that would also provide a cap on the amount of property taxes paid
by homeowners and an income tax credit to owners of commercial or
business property. But they removed those provisions Thursday after
senators criticized the provisions as not doing enough for the poor.
Though the Senate passed the local option plan, it also had to
consider other proposals.
One of those was a version of the House plan that would add a tax
break for industrial property.
Sen. Jake Knotts, a West Columbia Republican and sponsor of the
plan, said he didn't know how much it would cost. Others estimated
the price tag at $300 million.
The House put $116 million in its version of the budget to pay
for some of the cost of its tax relief plan. But the Senate Finance
Committee didn't include the money in its budget passed last week.
Sen. Larry Martin, a Pickens Republican, opposed Knotts' plan,
saying it would upset this year's budget and budgets for years to
come.
"I can tell you this, it's going to come back to haunt us," he
said.
But a motion to kill the proposal failed 16-24.
The Senate then agreed to consider yet another plan by Sen. Larry
Grooms, a Berkeley County Republican, who has offered proposals that
mix the issues of tax relief with school funding equity.
The Senate adjourned, however, before considering Grooms' plan or
taking other votes.
McConnell said he is unsure what plan the Senate will eventually
adopt but believes something will pass.
"I'm hopeful," he said. |