Deeply hated as it is, the property tax is the most stable and fair form of local government revenue, one of the leading experts on state tax issues told the Georgetown County League of Women Voters on Monday.

Holley Ulbrich, an economist at Clemson University's Strom Thurmond Institute, gave her analysis of some of the tax plans being tossed around in various discussions about the upcoming budget.

Ulbrich said the property tax is vital because state law doesn't allow local governments and schools to impose income taxes, and sales taxes would be at least 12 percent to make up for revenue lost from property tax.

Besides, she said, most public services are for property, so it's a fair way to levy taxes for local governments.

Ulbrich also said she doesn't agree with Gov. Mark Sanford's plan to eliminate the state income tax by raising the sales tax on gas.

Her comments come at a crucial time for the state. Facing a $1 billion deficit that will force cuts in many state and local programs and services, the new governor is proposing a plan to eliminate the income tax and bolster revenues with increased sales taxes.

Residents should be wary of state officials who pledge to cut property taxes, Ulbrich said. The state doesn't collect the tax and isn't responsible for making up the loss.

The cut in car taxes approved by voters two years ago will result in an 8.6 percent loss in local government revenue, and the state isn't replacing that, Ulbrich said.

Tax changes have trade-offs in who pays and how much, Ulbrich said. She said the existing $300 cap on sales tax for cars should be removed because it costs $100 million a year.

That means local governments will raise other taxes or fees to make up the difference.

The state should not be piecemealing tax reform this way, she said.

Instead, it should undergo a thorough review of tax equity and make substantive changes in the system. A legislative task force is working on those issues and may try to put some of its findings into law this year.

As for eliminating the income tax, it is a stable source of revenue for the state that is hard for people to escape, Ulbrich said. People can avoid sales tax by ordering items over the Internet, and they can avoid property tax by not owning property.

Sanford said he is aware of her concerns, but "those kinds of things can be easily taken care of."

One way, for instance, is to have a larger reserve fund to cover inconsistencies in sales tax collections.

Sanford said income tax is a tax on wealth creation, and he wants more wealth in South Carolina. That would add to the state's revenues in the long run, he said.

Tax relief should be targeted to those who need it instead of favoring groups such as the elderly, Ulbrich said. Some senior citizens can afford to pay the full tax.

Ulbrich was one of five economists who studied the multicounty business park arrangement between Burroughs and Chapin Co. Inc. and Horry County.

The group said the tax-incentive plan diverted money from schools to help pay for development.

State law still needs to be changed to allow school districts a seat at the table when those deals are made, she said.

Legislators declined to change the law, which gives the power to county councils, last year and the year before.

"That's a question still very much left hanging after events in Horry County," she said.