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Editorials - Opinion
Friday, April 07, 2006 - Last Updated: 9:26 AM 

The property tax relief chaos

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Anyone tuning in to a property tax relief discussion among state Senate leaders Thursday got a sampling of just how terribly confused that debate has become, not to mention the extent of the division among lawmakers. A prime example that was much discussed during a weekly Senate press conference sponsored by ETV is the lack of consensus even within the Finance Committee which authored the bill now up for debate.

The news that the chairmen of both the committee and the subcommittee are opposed to the bill - approved by a vote of 12-8 - led a reporter to question who would actually be leading the charge on the floor. Senate President Pro Tempore Glenn McConnell was the first to acknowledge the question was a good one. He kept coming back to that unusual turn of events during the program. The senator also made it clear that he, too, disagrees with the committee bill and believes it is likely to be killed early in the debate.

The Senate committee bill would strike all the language of the House-passed bill that calls for a two-cent increase in the sales tax to supplant the school tax on residential properties. It would substitute a three-pronged approach. The two-cent sales tax increase would be reduced to one cent and the resulting fewer funds used for tax relief for owners of automobiles as well as residences. It also would establish a circuit breaker provision that would give tax breaks to those whose incomes have not kept pace with the size of their tax increases.

This new version of property tax relief clearly is an attempt to satisfy those senators from counties whose residents aren't suffering from escalating property taxes but want something to show their voters back home. In fact, it was noted that the measure could have a greater benefit to those who own cars than those who own homes.

Sen. Scott Richardson of Beaufort observed that it became clear over the long months of studying the issue that a single property tax relief solution wouldn't fly.

But Sen. Nikki Setzler was as critical as Sen. McConnell of the committee bill. The chief problem, he said, is that "it doesn't give permanent residential property tax relief that the people indicated they want."

But neither is there is any reason to believe that lawmakers are even close to a plan for imposing a statewide tax that would eliminate the local school property tax on residences. The big hurdle is an agreement on a formula for sending any new state sales tax for schools back to the counties when some already feel shortchanged.

Sen. Richardson pointed out that in terms of total tax dollars sent to the state, Charleston and Beaufort are donor counties. Charleston, he noted, sends $484 million to the state and gets $165 million back; Beaufort sends $185 million and gets $68 million back.

Sen. McConnell did raise the prospect that a local option sales tax proposal for homeowner property tax relief being refined by Charleston Sen. Chip Campsen might wind up being the most acceptable compromise. But as now drafted that idea requires a constitutional amendment, which doesn't appeal to those who feel they have to give those lobbying for relief something definite to show for their efforts this year.

The fact that this is an election year is part of the problem. There's a real danger of a last-minute rush to have something to show at the polls, regardless of whether it has been sufficiently thought out.

It would be far better to concede that the studies to date have proven just how complex the tax relief problem really is and to enlist outside expert help for an independent study to be completed in time for debate in 2007 - a non-election year.