Property taxes have long been the whipping boy of those who like to rail against local government.

For years, property taxes were the only own-source revenue for funding local government in South Carolina. Since the passage of the Home Rule Act in 1975, following a constitutional amendment approved by the voters, county and municipal governments have had more options for funding police, fire and other needed services. This has allowed municipal government to decrease its dependency on the property tax.

Municipal government long ago realized that the same property taxpayer cannot adequately fund cities, counties and schools. We have pushed for more diverse funding sources, and the Legislature has approved several options.

The local option sales tax (LOST), passed in 1990, has allowed the municipalities in the 29 counties that have adopted the LOST to reduce property taxes and in some cases eliminate them completely. Since 1990, more than $600 million in LOST has provided property tax relief to the citizens of Charleston County. A substantial portion of LOST is collected from tourists visiting Charleston County.

In Florence County, which adopted the LOST in 1994, the owner of a home in the city of Florence valued at $100,000 pays no property taxes! The LOST tax revenue pays the county and municipal property tax.

The citizens of Richland County adopted the local option sales tax in November of 2004. The property tax bills being sent to Richland County property taxpayers this year will be reduced by $52 million collected through the sales tax. This will go a long way to ease the impact of the property tax reassessment.

The citizens of Greenville County would reduce their property taxes by $40 million if they would adopt the LOST and use all the revenue for property tax credit.

Other taxes such as the local hospitality tax, local accommodations tax, development impact fees and business license taxes allow municipal government options to reduce the burden on the property taxpayer. From 1990 to 2000, municipal government decreased the dependency on the property tax as a percentage of own-source revenue from 45.4 percent to 32.8 percent. This decrease shows that municipal elected officials heard their resident's frustration with property taxes and responded. With additional tools from the Legislature, we will reduce the burden even more.

This year the South Carolina General Assembly will be studying the property tax system. This study will not be the first on property taxes. A study done for Gov. Carroll Campbell concluded, "We do not have a property tax problem, we have a school funding problem." Since then, the problem of funding our children's education has grown into a crisis. School funding, which is a state government responsibility, should be the focus of the legislative study committees.

The annual municipal financial report of the S.C. Budget and Control Board for 2000 shows that statewide, 59.9 percent of property tax revenues go to school districts. This compares to 27.4 percent for county governments, 8.7 percent for municipalities and 4 percent for special purpose districts.

Municipal government looks forward to working in partnership with the legislative study committees to find solutions that reduce the property tax burden on homeowners and address our school funding crisis. We can show that a diversified menu of tax sources allows local elected officials the flexibility to choose how to fund necessary services. We can show that the local option sales tax works to reduce the burden on property taxpayers. We can show that working together, we can solve any problem facing our state.

Suggestions for the Study Committee:

1. Adequately fund public education with state tax resources.

2. Allow school districts to participate in development impact fees.

3. Change the school-funding formula that forces unnecessary property tax increases.

4. Provide for income-related circuit breakers to protect low-income levels from property taxes.

5. Provide income-related circuit breakers for the existing Homestead exemptions.

6. Allow the local option sales tax to be enacted by ordinance of the county council if 100 percent of the revenue is devoted to property tax relief.