COLUMBIA -- A Senate subcommittee took a tentative first step Tuesday toward ending most of the school property tax and levies on personal vehicles.

It's a long way from a done deal.

But South Carolinians would have to balance their gains against a 40 percent increase, or 2 percentage points, in the current 5 percent state sales tax. Renters also would receive an unspecified tax break.

Members of Judiciary and Finance subcommittees voted to direct their staffs to draft legislation calling for a $963 million cut in property taxes, paired with a projected $1.08 billion first-year increase in the sales tax. Food would be eliminated from the 2-point hike, but still would be subject to 5 percent sales tax.

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The small surplus would go into a reserve fund for potential shortfalls.

Under the proposal, $490 million would cover owner-occupied homes, $90 million each for renters and second homes and $293 million for personal vehicles.

Proposals to cover city and county operating funds were overwhelmingly rejected.

Senators directed that the draft include a provision that would allow some counties to opt out. Sen. Tom Alexander, R-Oconee, said "the current system works in some areas, and we shouldn't prohibit them from staying as is."

The nature and scope of any tax swap remain unclear because the subcommittees, full committee and the Legislature will still have to approve the specifics of a measure certain to be heavily lobbied.

"We're still in a state of flux," said Sen. Larry Martin, R-Pickens. "Nothing's been ensconced in stone."

Sen. Hugh Leatherman, R-Florence, Senate Finance chairman, said, "This is a first step, but a great first step to get us to where we are this afternoon. But yes, it will be wide open when we come back."

The vote, essentially a straw vote, was 11-1 with only Sen. Wes Hayes, R-Rock Hill, dissenting.

Left for the panel's Nov. 7 meeting was how to keep cities, counties and special service districts from raising property taxes for their operating budgets, thus eroding the proposed rollback.

"I think we can do that with some formula that will give them some breathing room, but ultimately require them to go to the voters if they exceed what most folks would consider to be normal growth in government," Martin said.

With legislators facing a brewing property taxpayers' revolt and an election year just around the corner, some tax reformers at the meeting were less than ecstatic.

Dan Harvell, chairman of the Anderson County Taxpayers Association, said the committee "is systematically moving away from what 80 percent of the people that attended hearings across the state said. They said they wanted total elimination of the property tax for education."

The draft proposal covers the operational portion of the school tax, but not the bonded indebtedness portion.

Sen. David Thomas, R-Fountain Inn, said Harvell is right, but he's looking at the best offer available for property tax relief.

"That's what we want, but you had only three in there for that idea, though," Thomas said.

The proposal would eliminate 90 percent of the school property tax, he said.

"Politics is the art of the possible, so we take the step on a ragged approach because we still have the full committee and the floor to fight it out on. It's not exactly where we wanted to be but it's a heck of a lot better than two days ago," Thomas said.

Two groups packed the Gressette Building meeting room: Members of tax relief organizations and individual proponents, many wearing yellow, blue and orange handbills urging, "Save Our Homes --Now," and a contingent of lobbyists.

Judiciary Chairman Glenn McConnell, R-Charleston, noting the latter, said, "I see all our lobbyists out there (who) seem to be increasing in number."

It was clear from the discussion that there was little sentiment for anything but a tax swap that is revenue neutral, that is, any cuts in property taxes will have to be made up by increases elsewhere. In this case, that's the state sales tax.

During the meeting, McConnell noted the pressure on lawmakers and the reality of coalition-building.

"We've got to get the votes to get something through" incorporating all the different concerns, he said.

A one-point sales tax hike would generate $601 million, but exempting food would remove $60 million, committee counsel Mike Shealy said.