Property tax relief
revivedWith no clear plan, Senate
takes a break from debate on system overhaulBy JOHN O’CONNORjohnoconnor@thestate.com
Two weeks of property tax debate provided lots of theater — but
few answers — about how the Senate will tackle the legislative
session’s highest-profile issue.
There is no plan, no consensus and no time left before the Senate
switches gears to the $6.5 billion state budget this week.
But for the first time this session, diverse clusters of senators
demonstrated a growing will to revamp the state’s tax system. And
key senators say a week off to reorganize might translate into major
tax changes for state residents before the General Assembly session
ends June 1.
“It gives everybody in the Senate an opportunity to put their
best amendments forward ... see if we can arrive at a resolution on
the issue,” said Senate President Pro Tem Glenn McConnell,
R-Charleston.
Thus far, no single approach won the support of a majority of
senators. But divergent plans — including a $2.4 billion overhaul
that would put public school funding completely in the state’s lap —
attracted support from coastal Republicans in fast-growing areas and
education-focused rural Democrats.
The bi-partisan support for such a broad overhaul surprised some
Senate leaders, who by the end of the week were predicting tax
changes were less a question of if than what.
WEEK OF DEBATE
Property tax relief came to the Senate floor in a form that few
senators supported. The lack of a plan to rally around created chaos
in the debate, which ended Thursday.
Rather than fine-tune a proposal, lawmakers spent the week trying
to cajole — and bully — their favored plans to the forefront of
Senate debate.
Some held up pennies to demonstrate their respective plans’
simplicity. Others held up representations of $1 million bills to
show how much was at stake for businesses and local governments and
schools.
Senators huddled in their lounge or off to the side to work on
details.
“We’ve got to adopt a framework, otherwise we’re still out here
wandering in the desert,” said Sen. Jim Ritchie, R-Spartanburg.
Plans were tweaked to gain support, but while a sharp property
tax cut would draw some votes, too many raised fees to compensate
for the lost revenue would lose nearly as many senators.
“We should have declared victory and gone home,” said Sen. Larry
Martin, R-Pickens, after the Senate adopted a framework giving
county voters the option to decide whether property taxes should be
cut in exchange for a higher sales tax.
When debate ended Thursday, die-hard supporters of property tax
cuts, such as Sen. Jake Knotts, R-Lexington, vowed to keep at it
until something passed.
PATH TO CHANGE
Whether the Senate is more likely to take a small bite out of
property taxes — allowing county voters to raise their sales taxes —
or go whole hog with a revamping of the system isn’t clear.
Lawmakers are divided on two issues: state funding of schools and
the impact on business. Democrats and Republicans have lined up on
both sides.
The sizes of the three major proposals reflect the varied desires
to tackle those issues:
• Small — Would allow each
of the counties to raise its sales tax enough to cover the operating
portion of school property taxes. The plan also includes a small
statewide sales tax hike that could cover tax relief for homeowners
who need it the most and businesses. The plan has support from
pro-business lawmakers, as well as coastal supporters desperate for
change because of rapidly rising property values and taxes.
• Medium — A 2-cent
statewide sales tax increase, which would cover school and county
operating costs. Property tax breaks have been added for businesses
and manufacturers, which could take hundreds of millions from the
state budget. This proposal is closest to the House version. This
plan has the most support from populist lawmakers, especially
Republicans.
• Large — A plan to
completely revamp public education funding, creating a separate pool
to pay all school operating taxes on all property. The plan would
raise the state sales tax by 2 cents and impose a statewide property
tax on everything except owner-occupied homes. Residents still would
pay property taxes on cars and second homes but likely less than
they do now. This plan is supported by Charleston and Beaufort
county Republicans and Democrats, whose districts are concerned
about fairness in school funding.
McConnell said a new option might emerge in the next week as
well.
While senators make up their minds, House members have been
amused by the debate, now that their once-dismissed plan is back in
consideration.
House members said they would need to see a final plan, but would
be willing to compromise.
“Our best response might be to come up with a third plan,” said
Rep. Bill Cotty, R-Richland, the House’s lead sponsor of changing
the tax system. When the House and Senate sit down to rectify their
differing plans, “It’s best to have as many options on the table as
possible,” Cotty said.
Thursday, McConnell was convinced House members would get that
chance.
“The signal from the Senate should be a positive signal to the
people of South Carolina,” he said. “We’re not involved in a
stall.”
Reach O’Connor at (803)
771-8358. |