Posted on Tue, Nov. 08, 2005


Proposal abolishes property, food taxes


Staff Writer

House Speaker Bobby Harrell wants to totally wipe out property taxes on your home and the sales tax on the food you buy.

In return, the Charleston Republican wants 2 cents more from you for every dollar spent at the checkout and would give the state more control of your schools, your police — even your garbage collection.

Harrell’s proposal, which should get the consent of a special House committee Wednesday, already has met with sharp criticism from state senators and some business leaders.

But Harrell’s plan is long on populist flair because it answers clamorous calls for property tax relief and addresses concerns about the unfairness of sales taxes on the poor.

“If we were to accomplish those two goals,” Harrell said, “we would have done a very good thing for the people of this state.”

Harrell’s $1 billion-a-year tax swap would differ from a broader plan under review by senators that would cut in half property taxes on owner-occupied homes and cars.

Members of a Senate property tax committee meeting Monday rejected Harrell’s approach in an informal vote.

That’s because it would put the state more in charge of not only paying for schools — which the Senate plan would do — but also such county and city services as trash collection, police and EMS.

“If the plan requires cities and counties to be dependent on the kindness of strangers, they’re not going to go for that,” said Sen. Scott Richardson, R-Beaufort, who blasted Harrell’s plan as “simplistic.”

Like the Senate proposal, Harrell’s plan would replace all property taxes used for school operations by raising the statewide sales tax by 2 cents on the dollar.

But Harrell’s plan would go a step further by also making the state responsible for debt on school construction now paid for by property taxes on homes.

Money would be returned to schools, counties and cities on the basis of a mix of population and existing education formulas.

Critics say some coastal areas would lose out because their needs for services are greater than their populations reflect.

“There’s a big difference between what Horry County has to spend during tourist season and what Hampton County does,” said Sen. Chip Campsen, R-Charleston.

Columbia Mayor Bob Coble said he’d need to study the plan, but “local people ought to have control of what they spend.”

Otis Rawl, vice president for public policy of the S.C. Chamber of Commerce, said the plan is a bad idea because it leaves businesses vulnerable to local tax hikes to make up for lost local control.

“This is a real scary bill to us,” Rawl said. “It leaves the business community as the only real property taxpayer out there.”

But Lewis Gossett, president of the S.C. Manufacturers Alliance, called Harrell’s plan “encouraging.”

“It would be hard to take either of the two plans and say we’re completely happy or completely unhappy,” he said. “Both have good aspects.”

Harrell’s plan pre-empts the work of a House property tax committee, which has spent months going over various ideas to reduce taxes. The proposal does borrow elements from ideas that committee was considering.

“The majority of the committee was coalescing around those ideas,” said House Majority Jim Merrill, R-Charleston. “I don’t think it deserves one person’s moniker on it.”

The House committee is expected to vote on Harrell’s proposal Wednesday, and many expect it will pass.

“If the committee chooses to go in a different direction, that’s fine,” Harrell said.

Don Weaver, president of the S.C. Association of Taxpayers, praised Harrell’s plan for targeting homeowners for relief but said it could be a tough sell because it wouldn’t lower taxes for renters.

“If it’s going to get any support, they’ve got to figure out how this is not just slamming the lower socio-economic groups,” Weaver said.

Also Monday, the Senate committee voted to eliminate the sales tax on groceries, cap how much local governments can spend and change when homes are reassessed.

The subcommittee voted unanimously to abolish the tax on unprepared food as a way to offset the regressive nature of lawmakers’ plans to substitute property taxes with higher sales taxes.

Reach Stensland at (803) 771-8358 or jstensland@thestate.com.





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