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Article published Mar 3, 2005
House subcommittee approves bill to make property taxes less
fair
A House subcommittee approved a bill this week that would
create drastic inequities in the state's property tax system.Under this bill,
rich longtime owners of waterfront property would pay taxes on much less than
the fair market value of their property, but young families just buying their
first house would pay taxes on the full value of their homes.Lawmakers are
determined to provide relief to homeowners who experience dramatic rises in
their property tax bills due to periodic reassessments. Last year, they passed a
measure that would limit such increases to 15 percent.Gov. Mark Sanford vetoed
the bill because,under its provisions, all property would not have been taxed
based on its fair market value. The owners of property that rises quickly in
value, who tend to be more wealthy, would have benefited by paying taxes on less
than the full value of their property, while owners of property that is not
increasing in value as rapidly, who tend to be less wealthy, would have paid
taxes on more of the value of their real estate.After the governor issued his
veto message, some lawmakers who had voted for the bill admitted it should have
been vetoed.But now they are working on a bill that would make the system even
less fair than the changes in last year's bill. The current bill would stop
reassessments of homes altogether. Property would be assessed at the price the
owner paid for it. The assessment would be changed when the property is sold or
when improvements are made to it.The effect would be that longtime owners of
property would be paying taxes on much less than the fair market value of their
homes, but relative newcomers would pay taxes on the full value of their
property.State law requires periodic reassessments so that everyone pays taxes
on the current value of their property. This ensures the basic fairness of the
property tax. To scrap the reassessments is to scrap the fairness, to
redistribute the property tax burden to new purchasers of homes.The only
effective way to provide property tax relief is to lower the tax rates.
Lawmakers should do this through a complete restructuring of the tax system,
which has become more complex and less fair through legislative tinkering over
the years. More tinkering, as with this bill, would only worsen
thesituation.