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Forum hits on property tax reform

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Local lawmakers answered a barrage of questions on the fast-moving state property tax reform issue Monday night, saying any reform that comes out of the statehouse is unlikely to please all -- or, in some cases, even most -- residents

At a panel discussion featuring state Sen. Scott Richardson, Rep. Richard Chalk, both R-Hilton Head Island, and tax expert Holley Ulbrich of Clemson University's Strom Thurmond Institute of Government and Public Affairs, the legislators dissected the tax bill that passed the House of Representatives last week.

The bill would allow voters to decide to eliminate property taxes for school district operations and local government operations on owner-occupied homes by replacing them with an additional 2 percent in sales tax.

Voters also would decide if property should be reassessed only when sold or substantially improved.

But Richardson, who serves on the Senate's ad hoc committee on tax reform, said it's not likely the Senate will seek to get rid of the property taxes.

"I think the Senate is much more focused on dealing with the assessment issue than with the tax swap," Richardson told the crowd of about 70 at the forum, hosted by the League of Women Voters of Hilton Head Island. "We're not at any kind of consensus with the tax swap."

Chalk said he agreed that, even though he voted for it, the House bill was flawed and he hopes the Senate will produce better legislation.

Richardson said he was "95 percent sure" voters will see a referendum on the ballot in November asking them to decide on a different form of reassessment, either:

• Point-of-sale reassessments that revalue properties only when sold or substantially improved.

• "Circuit-breaker" legislation that takes into account an owner's ability to pay; or a cap on reassessed value.

Chalk, Richardson and Ulbrich agreed that problems arise in trying to create a uniform tax system for the entire state, the character of which has changed drastically over the years.

"The current property tax proposals don't really do anything for increased assistance to poorer counties," Ulbrich said.

Ulbrich, who has prepared several reports in recent years on South Carolina's tax system, also said no state successfully has eliminated property taxes. She said the best way to address the system is to offer targeted relief to both low-income renters and other owners whose property value outpaces their income.

But the sticking point in the whole reform issue may be school funding, the panelists said.

The bill that passed the House last week offers no suggestion for how the proposed changes to the system would be used to pay for schools, Richardson said. Under the current funding formula, officials say Beaufort County stands to lose a substantial amount of money in the next year.

Richardson said he supports a proposal he likened to throwing a live hand grenade into a room: allowing schools that receive less than 25 percent funding from the state to be exempt from any state regulations.

"You get no money, why should we follow any state rules?" he said. "It would allow you to allocate money and teachers and things in a totally different way than you do today."

The legislators also told the audience they were concerned about the proposed idea of capping tax increases, something local officials have called an attack on home rule.

The Senate is expected to begin debate on the reform proposals sometime this week.

Also in attendance at the forum were Town Council members Bill Mottel, George Williams and Ken Heitzke and Beaufort County school board members Stu Rodman and Pam Edwards.

Contact Tim Donnelly at 706-8145 or . To comment on this story, please go to islandpacket.com.