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MONDAY'S EDITORIAL

The issue ~ Property tax reform

Our opinion ~ Governor, lawmakers agree the issue

will be on front burner 2006

Property tax relief makes front burner

There's not yet an agreement on what to do, but there appears finally to be a consensus that property tax relief must be a focus in the General Assembly in 2006.

With both houses of the Legislature appointing study committees to work on the issue while lawmakers are away from Columbia until January, the leadership is signaling the issue as a priority.

Realizing that any further effort at rolling back income taxes will be futile, at least until the property tax issue is dealt with, Gov. Mark Sanford has gotten on board. He's acknowledging that property tax relief will be the big issue in 2006, even as he makes the broader point that education funding needs at least simultaneous examination.

That's because the property tax provides 84 percent of local funding to schools. Roll back or limit property taxes and education will be affected.

The state's ability to replace the property tax is presently limited primarily to revenue from the sales tax and income tax. Thinking now is that if property taxes are cut, the other taxes will have to increase.

Some say that's not the case, with arguments likely to focus on an increase in the sales tax meaning money coming from outside the state via tourists and travelers. Increasing the income tax seems unlikely in the wake of cuts in the tax for small businesses a year ago.

A sales tax hike, or even an income tax increase, would not create near the howl that comes with property taxes. Mandatory reassessment every five years is resulting in tax bills in some counties doubling for people who have owned primary or even secondary homes for decades and decades. They're finding development has increased the assessed value of their property to a point where they cannot afford to own it.

Lawmakers have attempted to fix the problem by putting limits on the amount of increase from reassessment. The governor said he would not approve such limits because they legalized a system of taxing one homeowner at a rate higher than another.

Proposals on the table now include restricting reassessment to when property is purchased or when a major improvement is made, or putting a cap on how much the assessed value could increase over a period of time.

Any such changes must be examined closely for impact across the board. Simply transferring the property tax burden may prove to be more unkind and unpopular than the present situation.

Which brings us to the assessment of Senate leader Glenn McConnell. The Charleston Republican is on the mark with the concept of looking at changes as a fundamental reworking of the tax system. That will mean going to the voters to approve an amendment or amendments to the constitution.

"For us to do anything, we've got to have a constitutional amendment, otherwise the whole thing will be for naught," McConnell said after the Senate tax panel met this past week. "We cannot leave this to ... the courts."

And that is exactly where the issue will land unless Gov. Sanford and lawmakers explore the options and make reform foolproof.