Posted on Thu, May. 25, 2006

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Panel still can’t agree on property tax relief

House and Senate negotiators gained no ground Wednesday in resolving a standoff over statewide property tax relief.

Negotiators on both sides have agreed to a framework, which would increase the state sales tax rate to 6 percent from 5 percent, and apply roughly $500 million to pay school operating taxes of owner-occupied homes.

But the Senate rejected most of a compromise plan proposed by the House, one that included a constitutional amendment banning property taxes on owner-occupied homes, as well as cutting the sales tax rate on groceries by two percentage points.

“While the House is willing to take great strides to achieve property tax relief,” said House majority leader Jim Merrill, R-Berkeley, “the Senate seems content to take Oompa Loompa steps,” referring to the dwarflike denizens of Willy Wonka’s chocolate factory.

But Sen. Hugh Leatherman maintained that three-fifths of the Senate — 31 members — would not pass a constitutional amendment required by the House version. Leatherman also wanted counties to have the option of voting to impose taxes on homeowners if they wanted to fund special projects.

“We need to resolve that as soon as we can and move on,” Leatherman said. “They’ve acted in good faith, we’ve acted in good faith.

Senate Democrats and tax swap opponents also pointed toward state economist projections that showed most counties would collect more in sales tax than residents would receive in property tax relief.

The one agreement Wednesday, was that the continued delay on property taxes meant the legislative session would need to be extended past its scheduled June 1 end to complete work on the budget.