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School board slams tax swap
Senate backs referendum on capping reassessments; trustees fear statewide changes will force cuts locally

Published: Wednesday, February 15, 2006 - 6:00 am


By Ron Barnett
STAFF WRITER
rbarnett@greenvillenews.com

Greenville school trustees, fearing the loss of funds for programs such as magnet schools, decided Tuesday to send a letter to the state Senate, urging it not to swap property taxes for a higher sales tax.

The same day, the Senate gave initial approval to a bill to allow voters to change the Constitution to cap property reassessment.

Under the proposal, voters would decide in November whether they want to keep the current reassessment system or limit increases to 15 percent every 5 years.

Greenville school officials said that without tax revenue from homeowners, the district could eventually have to eliminate programs such as magnet schools, the Fine Arts Center and competitive salaries for teachers and bus drivers.

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"It's really scary to think about dropping back to the defined minimum program provided by the state," trustee Tommie Reece said.

The school board's action came in response to a bill the House approved last week. If the Senate passes it, the question would be placed on the ballot this fall.

The reassessment bill is expected to get final Senate approval today.

Reassessment limits would not apply to property transferred between the reassessment cycles. Those properties would be assessed at the sales price.

Property that is added on to or renovated also would get reassessed between cycles. General maintenance and repairs would not trigger reassessment.

An attempt to change the bill to point-of-sale reassessment, where property is reassessed only when sold or improved, failed. The House passed that kind of reassessment last week as part of its plan to provide homeowners tax relief.

The House bill also calls for a 2 percent increase in sales taxes on most items. This new revenue would replace the taxes now lev- ied on owner-occupied homes.

Taxes paid by homeowners account for 35 percent of Greenville County Schools' operational budget, or about $46 million, according to district spokesman Oby Lyles.

Although the bill calls for replacing that with money generated by sales taxes, the school board would no longer be able to approve bigger budgets that require a millage increase on homeowners.

The bill doesn't include any provision for funding the cost of growth in student enrollment, said the school district's legislative liaison, Pam Mills. The Greenville school district has grown steadily, prompting tax increases to accommodate additional students.

The district would continue to levy the 41 mills now used to make its bond payments and would still tax properties owned by businesses under the House plan.

The school board outlined several concerns in its letter to the Senate, urging the body not to adopt any legislation that would:


  • Hurt funding for programs the district now pays for out of tax revenue it controls.


  • Fund the district with a source that could be unstable, rising and falling depending on the economy.


  • Not address funding for growth.


  • Provide a "piecemeal" solution.

    Some board members also expressed concern about the impact increasing sales taxes would have on the poor.

    According to the state's chief economist, Bill Gillespie, the House plan would cost the state $116.8 million the first year, $248.5 million by the second year and $396.4 million by 2009-10.

    If voters approve the Senate's plan to cap assessments, they would return to the polls in November 2007 to decide on a county-by-county basis whether to opt out.

    "Voters always ought to be the ultimate decision makers," said Sen. Larry Martin, R-Pickens, who led a subcommittee that crafted the legislation.

    Leatherman said his subcommittee will hold its first meeting on the tax-swapping bill next Tuesday.

    Some senators have openly speculated whether the two chambers can agree on a tax substitution plan in a year when all House members face re-election and senators don't.
    The Associated Press contributed to this report.