State legislators are rushing to embrace property tax reform plans that could rob local governments of their ability to address local concerns, give extraordinary tax breaks to the state's richest citizens and saddle local businesses with huge tax inequities.
All of this in the name of eliminating, or at least significantly reducing, property taxes on homeowners. Taking place is a battle between state Senate and House leaders who are fighting to come up with the most politically popular property tax reform plan. Underneath this populist assault on property taxes is an unprecedented grab for power by state legislators.
Both the Senate and the House are toying with plans to replace some, or perhaps most, of the property taxes with a state sales tax. This solution is worse than the problem. Legislators have it within their power to remove some of the pain of property taxes and the five-year reassessments without undermining local governments and making it difficult for them to provide local services.
Common-sense ideas for lessening the sting of property taxes have been put forth by local government officials: (1) Give the state a greater responsibility for funding public education. (2) Give local governments more ways to raise money so they don't rely so heavily on property taxes. (3) Give local governments more flexibility with some of the resources they now have, such as the accommodations tax or hospitality tax, that have restrictions on how the money can be spent. (4) Restrict the "revenue bump" local governments can get through reassessment by returning to the days of "revenue-neutral" tax growth that existed a decade ago. (5) Rein in some abuses with property tax breaks that are handed out by county governments throughout the state.
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Such ideas aren't as emotionally appealing as eliminating property taxes. But they also won't run the risk of shifting more of the tax burden to lower-income people while also shifting more power to Columbia.
A statewide sales tax to replace some or most property taxes would put state lawmakers in the business of dividing up revenue to send back to Greenville or Laurens or Lexington for essential local services such as fire protection and law enforcement. And eliminating property taxes on one group, namely homeowners, would likely increase the tax burden on businesses.
Of the plans now on the table in Columbia, the most damaging would be the one from House Speaker Bobby Harrell, who wants to completely eliminate property taxes on homes and the sales tax on food. The House property tax committee last week endorsed Harrell's plan that increases the sales tax by 2 percent and eliminates property taxes on homes except for bonded indebtedness.
Rep. B.R. Skelton, R-Six Mile, was a rare voice of reason last week. "We just need to recognize that ... we're taking the burden away from the people who have high-end properties and we're going to shift that burden to the people who can least afford it," he was quoted as saying by The Associated Press. More legislators need to start talking such sense.