Gov. Mark Sanford will present his tax-reform
proposals to the South Carolina Legislature when it reconvenes in
January.
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- South Carolina needs real revenue reform to spur economic growth
and to give the state a competitive edge, not the flash of a
three-day sales tax holiday that makes people feel good, South
Carolina Gov. Mark Sanford said in an interview late last week.
"What we've got to do is look at tax changes that drive the
standard of living curve upwards," said the first-year governor, who
took office in January and has held budget hearings this summer to
get a jump on next year's fiscal blueprint. "We need to look at
significant changes that create significant results."
In the face of the state's ongoing budget crisis, sour economy
and strong likelihood of another wave of deficits next year,
legislative leaders - both Democrat and Republican - say it's
unlikely the governor's pet reform, a substantial cut in the state
income tax, will be passed in the session that begins in January.
"Nothing's impossible, but it would be a hard sell," said state
Rep. Roland Smith, R-Langley, the chairman of the House Education
Committee. "Realistically, in light of the day's economy, in light
of education cuts and the need to fund health reforms, it's going to
be difficult to sell tax reductions."
State Sen. Tommy Moore, D-Clearwater, was even more pointed in
his criticism of Mr. Sanford and the Republicans who control both
houses of the state Legislature. South Carolina needs every cent of
revenue it can get next year, he said.
"This isn't a train wreck; this is neutron bomb time," said Mr.
Moore, the author of a rejected proposal to raise cigarette taxes by
53 cents a pack and provide target tax cuts to small businesses and
corporations.
"What have we heard so far in terms of leadership? Hearings that
say we have to eliminate waste, talk about tightening our belts and
doing more with less. We're way past the time for all the political
sayings and political jargon," he said.
South Carolina relied heavily on one-time federal tax relief
money to close the gap between spending and revenue in the budget
passed in June. About $255 million of the $322 million in one-time
money came from Washington. That only postpones a looming fiscal
disaster, Mr. Moore said.
Mr. Sanford counters such talk, saying dire fiscal days call for
bold reform, such as a cut in the state income tax.
"You wait till times have gotten good, you've waited too late,"
Mr. Sanford said. "South Carolina cannot compete as a state by being
midrange in taxes. We won't develop true economic growth and
prosperity by staying where we are."
Mr. Sanford's proposal would gradually reduce the state's income
tax from its current level of 7 percent to 5 percent in 15 years.
South Carolina has the 11th-highest state income tax in the nation,
Mr. Sanford said. The national average is 4.6 percent, and the
average among Southeastern states is 4.25 percent.
This cripples South Carolina's negotiating leverage on corporate
relocations because its high income tax rate scares off the
executives making such decisions.
"You can have the greatest package of incentives in the world,
but the management team may go to a different state because our
income taxes hit them hard in the pocketbook," Mr. Sanford said.
Reach Jim Nesbitt at (803) 648-1394 or jim.nesbitt@augustachronicle.com.
Augusta Chronicle 
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