COLUMBIA - The state House of Representatives property tax committee
gave preliminary approval Wednesday to a plan that calls for the
elimination of nearly all property taxes for homeowners by increasing the
state's sales tax by 2 cents.
The proposal also completely exempts groceries from sales tax and
allows the reassessment of property only when it is substantially improved
or transfers owners.
An overwhelming majority of committee members supported the basic
tenets of the plan, which Speaker Bobby Harrell, R-Charleston, laid out in
a letter to lawmakers last week. But it does not completely abolish
property taxes on owner-occupied homes, as Harrell and others
suggested.
The proposal leaves $112 million in annual debt associated with the
bonds issued by school boards, counties and municipalities. That leaves 14
percent of property taxes intact.
The committee also made a few other changes and added new provisions to
the original plan. They include a measure that rolls back property
assessments to the 2000-01 levels and a stipulation that local governments
cannot raise taxes on other types of property.
By not removing the bonded debt payments, committee members steered
clear of repealing a handful of sales tax exemptions, a traditionally
arduous task. The committee still needs to find $3 million in revenue to
balance the bill.
After the meeting, lawmakers hailed the committee's vote, which was the
first significant step the House has taken to develop a tax-relief package
amid a growing fury about the current property tax system.
The committee's decision is just the first step in a long process of
legislative wrangling that is expected to surround the property tax debate
when the General Assembly resumes in January.
They will continue to discuss the issue when they meet later this month
One major hurdle to overcome is a compromise between the House plan and
a rival proposal from a Senate property tax committee. The broader Senate
proposal cuts property taxes for homes, cars, boats and second homes in
half using an identical sales tax increase. House lawmakers made it clear
the tax relief should be directed specifically at homeowners.
Contact John Frank at (803) 799-9051 or jbfrank@postandcourier.com.