Lawmakers should steer clear of quick piecemeal tax reform measures

Published October 10, 2005

Only 50 people turned out to a public forum on property tax relief held in Spartanburg this week by a legislative task force. Hopefully, the lack of turnout will keep lawmakers from rushing into another ineffective piecemeal fix.

The General Assembly has passed several quick "tax relief" measures in recent years, aimed at appeasing voter frustration with rising property taxes. They have been unhelpful.

The first was homeowners property tax relief. It was intended to provide each homeowner with a $100,000 exemption toward school property taxes.

It ended up being a burden on the state budget that lawmakers struggled with each year. It also got corrupted by lawmakers from low-tax counties who wanted a bigger share of the money. Now, homeowners in some other counties get much more than a $100,000 exemption while Spartanburg homeowners get less.

Lawmakers also wanted to respond to voter anger over vehicle property taxes. So they approved a couple of referendums letting voters reduce these taxes. Voters did so, but the measures just shifted more of the tax burden from vehicle owners to homeowners and businesses. School districts and local governments still needed to raise the same amount of money, so they raised it from real property taxes.

Now politicians across the state are declaring that property tax relief is their top priority. There are competing proposals to substitute property taxes with an increase in the sales taxes, which would help homeowners at the expense of renters and the poor. There are proposals to end or limit property reassessments, which would make the property tax itself unfair.

Instead of approving another quick, election-year measure that promises relief but instead makes the state's tax code less stable and less fair, lawmakers need to take a look at the entire tax system. They should review the way South Carolina funds state and local governments and schools, the mix of income, property and sales taxes.

Lawmakers should take the time to examine the system and design major changes or a new system that spreads the tax burden as fairly as possible on individuals, industries and businesses. They should devise a system that allows local governments and school districts to raise their own revenue without depending completely on property taxes. They should devise a system that is simple and fair.

But first they should avoid making the problem worse with another "relief" measure aimed more at winning votes than in repairing the state's tax system.

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