Committee OKs property tax relief plan

ROBERT KITTLE, News Channel 7

Property tax relief will be the biggest issue facing state lawmakers when they go back into session in January, but a House committee has gotten a head start. It passed a property tax relief bill Wednesday afternoon.

The plan would eliminate most of the property taxes that homeowners pay. They would still be responsible for the property taxes that go to pay back bonds issued by school boards, counties and cities.

They also would have to continue paying for services like garbage pickup.

But the rest of the property taxes on owner-occupied homes would disappear. So would the entire sales tax on groceries.

To make up for the lost money, the plan would raise the state sales tax by two cents.

Lexington homeowner Jim Berkley thinks it's a good idea. The property taxes on his one-story, 2000-square-foot home in Lexington have gone up to more than $2,700.

"The whole tax system is just not set up right," he said.

"And I think, yeah, probably the sales tax would be a better way to do it."

He worries, though, that after raising the sales tax and lowering property taxes, local governments would slowly start raising property taxes again in a few years.

But House majority leader Jim Merrill, R-Berkeley, said, "This plan will restrain future spending so relief isn't an excuse to raise taxes."

Berkley did the math and figured out that, with an extra two cents in sales tax, he would have to spend an additional $135,000 a year to equal his $2,700 property tax bill.

The committee plans to formalize the bill next month that will be introduced in January. They still have to work out some details, but the plan is likely to include constitutional amendments that voters will have to approve.

A state Senate committee is also working on property tax relief.

Its plan would also raise the sales tax by two cents and eliminate the sales tax on groceries.

But the Senate plan would remove only that portion of your property taxes that go to pay for school operating expenses.

The Senate plan would, however, also apply to other property like second homes, vehicles and rental property, while the House plan applies only to owner-occupied homes.