Gov. Mark Sanford's decision on what to do about a controversial statewide tax-cap bill still on his desk should have gotten a whole lot easier. Surely, the governor no longer is even considering signing the bill that would cap property reassessments at 20 percent in the face of a circuit court judge's conclusion, which we reported Friday, that such legislation is unconstitutional. His choices should be narrowed to either vetoing the bill now or waiting a few months for a final decision from the S.C. Supreme Court.
While Circuit Judge A. Victor Rawl isn't the last word on the issue, he was appointed a special referee by the state Supreme Court to make findings of fact and recommendations on a 15 percent local-option tax cap passed several years ago by the General Assembly. The cap, which was adopted only by Charleston County, was legally challenged by the city of North Charleston. Judge Rawl has concluded that the tax cap violates the state constitution because it allows the county "to ignore actual value as it levies taxes and to levy taxes in a less than uniform manner. It also unfairly distributes the burdens and benefits of tax relief without a rational basis."
The reassessment cap is viewed as providing relief primarily to those in areas with escalating property values, such as the resorts and the city of Charleston's historic district. City of North Charleston officials have argued that capping the value of properties that have soared since the last reassessment will adversely impact those whose properties have remained virtually the same or declined. Most North Charleston residents, the city contends, will pay more taxes with the cap than without.
Even some of those who favor tax caps recognize the inherent legal difficulties in trying to impose such caps without a constitutional amendment. The state constitution very clearly states that taxes must be levied on the fair-market value of property. While Judge Rawl's ruling deals with the 15 percent local-option cap, the same legal issues are present in the 20 percent statewide cap on the governor's desk. Because the Legislature passed the 20 percent statewide cap at the 11th hour, the governor has until after the Legislature reconvenes to decide what to do about the bill.
North Charleston attorney Derk Van Raalte said he believes it is now possible for the Supreme Court to make a final decision on the tax cap before the General Assembly returns in January. That's the critical legal guidance the governor and the General Assembly need before taking any further action on tax reform proposals.
Until then, the governor should, at the least, do nothing and let this legal test run its course.
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