Island Packet Online HILTON HEAD ISLAND - BLUFFTON S.C.
Southern Beaufort County's News & Information Source 

Proposed tax reform would sap local power

Quick Links
Click here to contact Gov. Mark Sanford

Click here to contact S.C. Rep. Rick Quinn

Quinn wrong to assume legislature knows best

Published Monday, December 1st, 2003

The new state tax reform plan promoted here in November by state Rep. Rick Quinn would erode local control of local issues.

The bill being promoted by the House majority leader would raise the state sales tax from 5 percent to 7 percent, reduce the state income tax, eliminate property taxes levied for schools and eliminate the annual tax on cars and trucks.

The bill proposes to raise teacher pay and fund schools statewide equally on a per-pupil amount.

Money from the hiked sales tax -- which would not apply to food, drugs or accommodations -- would be placed in a trust fund for education, separate from the state's general fund.

Quinn says the bill would put South Carolina in a more competitive posture by making sales tax, income tax and property tax rates similar to nearby states.

The bill also would include about $1.7 billion in annual tax increases by eliminating or reforming a long list of sales tax limits or exemptions. The biggest revenue producers on the list would be sales tax on residential electricity, gasoline, toll charges, "top-dollar" lottery tickets and water sold by public utilities. The plan would raise the cap on vehicle sales taxes from $300 to $800 the first year and then by $100 each year until the cap reaches $1,000.

Quinn says the bill should be a starting point for a discussion on comprehensive tax reform. Gov. Mark Sanford and other Republicans have announced, or are expected to announce, other tax reform proposals.

A big part of the discussion needs to be this bill's takeover in Columbia of local decisions.

The bill co-sponsored by Quinn, a Republican from the Columbia area, and state Rep. Vincent Sheheen, D-Kershaw, is based on the assumption that when it comes to sound government, the state legislature knows best. It does not. Home Rule, a pillar of public policy that was late coming to South Carolina in the mid-1970s, gave local decisions back to county councils and town councils. That's where it belongs.

This bill would undermine the spirit of Home Rule in a number of ways. It would:

  • Eliminate fiscal autonomy from county councils for school boards that have this authority. The state Education Oversight Committee recommends that all school districts have fiscal autonomy.

  • Prohibit local governments from funding education with property taxes (other than for capital improvements). Local communities deserve to make that decision, not Columbia. The legislature is not the Politburo. Locally elected leaders should decide if the local community wants to do more than the state funds for its schools.

  • Place spending caps on local governments.

  • Require a two-thirds vote by cities, counties and the state before they can raise taxes above inflation.

  • Eliminate county tax assessor offices and put an end to local property reassessments. Property tax would be based on the "cash value approach" using a value set only when a property sells or is dramatically improved. That foolishly keeps government from taking advantage of rising property value, and could keep commercial properties that rarely change hands from paying their fair share.

    There are other broad concerns about the Quinn proposal:

  • Sales tax income generally rises, but it is less stable than property tax. Governments need a balanced portfolio of income, property and sales taxes. It is not smart to sharply diminish any one of the three.

  • Sales tax is the most regressive of taxes. It places a higher burden on the poor than the rich.

  • Local option sales taxes would be harder to approve, and that would hinder communities from meeting their needs. Without it, this community would not have a wider, safer S.C. 170 under construction, with two major bridges linking the county population centers.

  • The proposal is based on promises that the state legislature is notorious for breaking. For example, education formulas hardly matter; the legislature does not meet its current obligation on per-pupil funding. And the legislature egregiously raids trust funds for general operations. There is no reason to believe this plan would be any different.
  • The Island Packet

    Copyright © 2003 The Island Packet | Privacy Policy | User Agreement