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Friday, August 11    |    Upstate South Carolina News, Sports and Information

Delays, caps won't fix property taxes

Published: Sunday, August 6, 2006 - 6:00 am


We've been hoodwinked, I think, and some of us are going to pay for it next year.

Greenville County Council's decision to delay reassessment was shortsighted, motivated by a few people who stand to gain and bought like snake oil by a population that's understandably tired of increasing property taxes.

First a confession: I moved to South Carolina from a state that rarely saw a tax it didn't like. My property tax bill on a home worth $97,400 in Green Bay, Wis., was $2,164. I expect my tax bill this year on my home in Greenville County (worth about $125,000) to be a little more than half of that. You might understand, then, why I initially wondered what all the fuss was about property taxes.

But it's all perspective, I suppose. In Wisconsin, no property taxes are collected on cars, and groceries are exempt from sales taxes. That aside, the last thing I want to do is tell everyone in South Carolina they're crazy to complain about how high their taxes are. But it is counterproductive to complain about them and then take action that might make it even worse.

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That's what Greenville County did last week. But it was drawn into it by a Legislature that sold us a bill of goods in the guise of property tax "relief." That plan includes a referendum this fall to cap the growth of assessed property values at 15 percent. I expect the referendum to pass, given the angst we have over property taxes.

There certainly will be some people able to say the cap relieved their taxes -- but they'll be the owners of higher-priced homes whose values are skyrocketing. Those in modest or less-than-modest homes that increase in value at or below 15 percent (not to mention those decreasing in value) will wind up bearing a greater share of the burden, and their taxes might actually increase. Regardless, they'll probably pay more than they would have without a cap and if reassessment had been done this year.

It's been said by some that property taxes are like paying rent on your home, that you never really own your property. That's hardly true. Every home incurs expenses for the community. Roads must be built and maintained, fire and police departments must be staffed, garbage has to be collected and children need to be educated.

Property taxes are the most equitable way to pay for all that, and the fairest way to figure out who owes what is to base the taxes on the values of our homes. Those whose homes are worth more pay more and those whose homes are worth less pay less. For that system to work, the county must regularly recalculate assessed values. If it doesn't, things get out of whack.

Throw in an artificial 15 percent cap and delay reassessment until after that cap is in place, and you've got a recipe for disaster. We're now almost certain to wind up collecting too much taxes from people whose homes' values increase less than 15 percent, and not enough from those whose homes should have increased more than 15 percent.

If some entities take advantage of the system, the answer isn't to treat the symptoms. We need to prevent those entities from reaping windfalls due to reassessment and require them to be honest with constituents by explaining precisely how taxes work. For instance, a 42.5 mill rate year after year to pay for school improvements is, indeed, a tax increase when levied against growing property values. Tax policies for all entities should essentially be "revenue-neutral," with overall mill rates adjusted down to collect the same levy based on new property values unless a strong case is made for a tax increase.

Delaying reassessment won't prevent tax increases. Neither will a 15 percent cap. Those options only make the system less fair as long as there are systemic problems. County Council didn't fix anything Tuesday night, and it might have made things worse.

I'm afraid next year, when the cap is in place and reassessment takes place, many of us are going to pay with unexpectedly higher property taxes.

What sort of elixir will we use to fix it then?


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