After months of study and debate, our report Friday said the property tax
relief plan approved by House-Senate conferees was written on the back of a
greasy chicken takeout box. That says volumes on the extent of the explanation
needed about this hastily conceived proposal.
According to our news account, the House's proposal for a sales tax increase
to pay for a portion of an estimated $570 million worth of tax relief on
owner-occupied homes is part of the plan - in a reduced form. The House's
proposed increase has been lowered from two cents to one for a statewide sales
tax of six percent and would not apply to groceries or accommodations. Further,
the tax on groceries would be lowered to 3 percent starting in October.
While the one-cent increase, along with the use of surplus funds, is aimed at
eliminating the school tax portion of the property tax bill, it also could
provide some small relief to homeowners from county taxes.
A separate provision would allow individual counties to opt for a one-cent
tax to provide all properties with relief from the countywide tax. Another
provision, which is aimed at selling the plan to some of its previous opponents,
would ensure that all counties would get no less than $2.5 million for education
from the new tax. News accounts said projections show that guarantee would
provide a windfall for 20 of the state's poorest counties. But left unresolved
is the complaint by counties such as Charleston and Beaufort that the education
funding formula itself is unfair. In fact, from the outset a number of lawmakers
have predicted that the distribution of the new sales tax dollars would be the
most difficult to sell.
While Charleston-Berkeley Rep. Jim Merrill, one of the conferees, believes
the new plan can get the needed two-thirds vote in in the House, Senate
President Pro Tempore Glenn McConnell is far more cautious. "The devil," he told
us, "is in the details." A number of his questions deal with the funding
formula, particularly what happens when a county gets less from the state and is
prohibited from reimposing a tax on owner-occupied homes.
"I just want to make sure," he said, "that they haven't created unintended
consequences that will become worse than the remedy. I have been one of the
biggest supporters of property tax reform, but I am not sure how all this
crunches together and works."
Sen. McConnell is looking forward to some detailed explanation on the floor
of the Senate when the Legislature reconvenes on Tuesday. So should we all.
Already, a leader of a group pushing hardest for homeowner tax relief has been
quoted as saying his group is less than satisfied and will be back for more
relief next year.
No question, election-year politics has been pushing the property tax relief
effort, particularly in the House where members are up for election this year.
Unfortunately, there's little time left in the session for the kind of detailed
discussion that the multi-part plan devised by the conferees should receive.
This is a plan the conferees not only will have to sell to their colleagues
in the Legislature, but to the voters through the needed constitutional
amendments. We are waiting to be convinced.