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Wednesday, May 24    |    Upstate South Carolina News, Sports and Information

Senate passes optional tax swap
Residents would vote on raising sales tax to cut property taxes on a county-by-county basis

Published: Wednesday, May 10, 2006 - 6:00 am


By Tim Smith
CAPITAL BUREAU
tcsmith@greenvillenews.com

COLUMBIA -- Voters could decide in November whether counties have the option of swapping a sales tax increase for a reduction in school or county taxes under a plan approved Tuesday by the Senate.

The plan must still be approved by the House and Gov. Mark Sanford. Neither was a certainty Tuesday.

The House passed its own, very different plan in February. Its leaders signaled last week that the Senate plan passed then would likely not be enough for House members.

A spokesman for Sanford said earlier Tuesday the governor wants any tax-relief plan to be revenue neutral, offer comprehensive reform and not put businesses at a competitive disadvantage.

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The House plan would reduce most taxes for owners of owner-occupied homes, eliminate the sales tax on groceries and increase the sales tax on other items by two cents per dollar.

If the House votes not to accept the Senate plan, as many senators expect, a negotiating committee will be appointed with members from each body to try and reach a compromise.

The plan approved by the Senate on Tuesday was a scaled-back version of legislation it passed in the last week.

Fillibusters on Tuesday stalled progress on other plans, and leaders concluded the only plan that could pass would be a simple version of local option, senators said afterward.

The plan is scheduled to receive a perfunctory final reading Thursday before going to the House.

Sen. David Thomas, a Greenville County Republican, said he believes Greenville County voters will choose to use the plan if the Legislature adopts it.

"This was a huge breakthrough," he said of Tuesday's vote.

But Sen. Larry Grooms, a Berkeley Republican who had pushed to include school funding equity in the plan, voted against the final bill and called it "horrible."

He said only counties that have lots of tourist dollars or wealthy homes will benefit. And he said he doesn't believe many counties will choose to try the tax swap.

"We've really done nothing here," he said.

The Senate on Monday had approved a provision that would have removed all school operating taxes statewide by June 30, 2009, though it did not detail how the funds would be replaced.

It had previously approved proposals to remove county operating taxes for most homeowners in exchange for a one-half cent increase in the sales tax and to give each county the option of going further with tax relief.

When the required constitutional amendment legislation came up Tuesday, however, it became clear supporters didn't have the required two-thirds vote. Sen. Phil Leventis, a Sumter Democrat, filibustered, causing consideration of the legislation to be withdrawn.

At that point, Grooms, who had tried six times previously to pass a tax plan with school funding equity, filibustered, hoping supporters could win enough converts as he spoke. But he said it had the opposite effect, and it became clear his plan wouldn't pass.

During lengthy recesses Tuesday, senators met behind closed doors to try and work out a compromise.

Senate President Pro Tem Glenn McConnell said the simple local option plan became the last hope of getting the numbers of votes needed for a constitutional amendment.

"It was obvious by mid-day today that no plan had a 60 percent or two-thirds vote to go forward," he said. "The Senate was treading water."

Rather than end the session with nothing, senators agreed overwhelmingly to support the local option.

They were quick to praise it afterward.

Senate Majority Leader Harvey Peeler called the vote proof that "a miracle can happen."

Sen. John Land, leader of the House Democrats, called it a "beautiful plan."

Even Sen. Jake Knotts, a West Columbia Republican who had pushed versions of the House plan, approved.

"It was the only thing we could get out of the Senate," he said. "It's not the prettiest baby in the nursery, but it's a baby."

But Grooms derided the compromise as a "political scapegoat," something that would allow senators to say they voted for tax relief.

He predicted House and Senate negotiators will be unable to agree on a plan, leaving taxpayers without relief and lawmakers in both chambers pointing fingers at one another.

McConnell said negotiators still can work out a plan both bodies will approve. While not a comprehensive plan, he said what the Senate passed Tuesday is supported by a lopsided vote.

"Is it the best way, the most comprehensive way? No," he said. "This keeps it alive. It gives choices, and it gives the public an opportunity to speak."

He said if the Legislature adopts the local option plan, voters can tell lawmakers in November if that is what they want. If they reject it, he said, lawmakers can pursue more comprehensive reform next year.

"We passed the decision to the public," he said.


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WHAT'S NEXT
  • Thursday: final reading in Senate
  • House votes on Senate plan
  • If rejected, plans go to conference committee
  • Any plan approved in committee must win House and Senate votes
  • Bill goes to governor

    SENATE PLAN
  • Lets voters in each county decide on raising sales tax to cut property tax.

    HOUSE PLAN
  • Raises sales tax two percent to cut tax on most owner-occupied homes
  • Eliminates sales tax on groceries

  • Related

    On the Web
    South Carolina Bill 4449: Property tax reform bill

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