COLUMBIA, S.C. - State senators drafting a bill to cut property taxes decided Monday the proposal should include eliminating the sales tax on groceries, capping how much local governments can spend and changing when homes are reassessed.

The 12-member joint Senate finance and judiciary subcommittee voted unanimously to abolish the sales tax on unprepared food, as a way to offset the regressive nature of lawmaker's plans to substitute property taxes with higher sales taxes.

Proposals by both state House and Senate members include raising the state sales tax by 2 cents, or up to 7 cents for each dollar sold.

"We've got to make sure we don't place the burden on poor folks who don't own homes," said state Sen. Vincent Sheheen, D-Camden.

The sales tax on groceries puts $309 million into state coffers. Senators did not decide where that money would otherwise come from.

"Once we determine the issues and see the bottom line, then we'll start looking for revenue," said Sen. Hugh Leatherman, R-Florence, chairman of the Senate's Finance Committee.

Leatherman noted that eliminating the sales tax on groceries helps the "million-dollar home owner" as well as renters who don't own homes.

But Sen. Jim Ritchie, R-Spartanburg, described it as a "clean," efficient way to give renters tax relief.

In an effort to prevent local governments from raising property taxes and gobbling up intended tax relief, the senators voted to cap their tax rates. Under the proposal, budget increases would be tied to personal income growth statewide.

Since the soon-to-be-drafted bill would not eliminate business property taxes, it was important to protect businesses from being hit with tax increases and the cap would do that, said Senate President Pro Tem Glenn McConnell, R-Charleston.

Senators also voted to pursue a constitutional amendment to revamp the reassessment process. It would direct counties to reassess homes only when they're sold or substantially added on to.

That would protect property owners who complain they're being taxed out of their houses because their homes' values are skyrocketing while their incomes remain unchanged. "Reassessment was never meant to be an Easter basket," McConnell said.

Under the Senate's proposal, counties could opt out of the point-of-sale reassessment approach and choose from other methods allowed by the state, including keeping the current system. But voters would have to approve that in a referendum.

At its last meeting, the subcommittee decided to concentrate on property taxes that fund school operating costs, but some senators, including McConnell, said Monday they want to go further. The subcommittee will discuss Nov. 16 whether to also take the operating costs of city, county and special purpose districts off residents' tax bills.

That would resemble a House proposal.

A bill sponsored by House Speaker Bobby Harrell, R-Charleston, would eliminate all forms of property taxes on homes. He said that is the only way to ensure permanent tax relief. His proposal would also abolish sales tax on groceries. Harrell said a 2-cent sales tax increase on nonfood items would pay for the plan.

"What we ought to do is a major bold step to deal with property taxes and tax reform in general," Harrell said. "When we're through with doing this, I want to be able to make the statement that in South Carolina, we do not tax people's homes."

House members studying property tax reform will look at Harrell's proposal and others on Wednesday. Harrell has also asked the group to look at whether to revoke some sales tax exemptions.