| Carolina lawmakers may cut property tax AIKEN - The tax-raising power of South Carolina's cash-strapped school districts lies in the hands of a circuit judge in a small rural county, but lawmakers might beat him to the punch in the next legislative session. Spurred by property owners angry about double-digit millage increases for schools, lawmakers likely will draft legislation calling for an elimination of property tax support for schools, a cut they would offset with a sales tax increase, said state Rep. Roland Smith, R-Langley, the chairman of a key House subcommittee on education. "I think it's something worth looking at as long as you ensure the availability of the money, and you're not allowing the state to reinstitute the property tax," Mr. Smith said. He said the statewide penny sales tax started in the late 1980s by then-South Carolina Gov. Richard Riley yielded $30,000 less in 2003 than the previous year but is up for 2004. "My suspicion is that most districts like what they have because it (property tax) is more stable," Mr. Smith said. A property tax, he said, "may go up one mill, but a sales tax could fluctuate depending on the economy." At stake in the court case, dubbed the South Carolina school equity trial, is the ability of the richer, urban school districts, including Aiken County's, to raise property taxes to compensate for the shrinking financial support from a state mired in a four-year budget crisis. Aiken County school board member Larry Murphy said the Clarendon County circuit judge hearing the case probably won't render a decision until mid-2005, after the legislative session has drawn to a close. That would allow the judge to get the Legislature's take on the issue before making his final decision. "They are going to wait until all the legislators have gone to the beach and the woods and home," Mr. Murphy said. The 40 districts that filed the suit, most of which are in rural corners of the state, say the current formula gives richer districts an unfair dollar advantage. The case, which already has cost the state nearly $4 million in legal expenses, has dragged on for more than a year and could wind up in the South Carolina Supreme Court, extending it even further. For the past four years, the idea of getting rid of local property taxes in favor of a state sales tax has been kicked around by legislators, but so far nothing has been passed. Mr. Smith said the idea is likely to be revisited in the legislative session that begins Jan. 11. Property tax issues deeply divided candidates running for the Aiken County school board and proved to be a hot issue at candidate forums. "The school board gets almost 70 percent of our property taxes, and I know some people in our organization are questioning what is being done with that money," said Mike Simons, the president of the Aiken County Taxpayers Association. Since 2001, the state has come up short by the middle of the school year, forcing districts to squeeze taxpayers to make up the difference, said Jim Foster, a spokesman for the South Carolina Department of Education. For the first time in 15 years, the McCormick County Board of Commissioners had to increase property taxes. Mr. Murphy said that after five years of millage increases, Aiken County taxpayers would welcome doing away with property taxes. But without school property taxes, which raise about $1.8 billion in school districts across the Palmetto State, local school districts would be almost totally dependent on the state for local revenue. "I'm sure the taxpayers of Aiken County would love it, but then again, what is the state going to introduce? "I'm always leery of the state because when they start taking money programs away, they put on ones that will cost you 10 times more," Mr. Murphy said. "But based on what the state's doing, they're not doing a very good job of funding the schools. Is the state Legislature going to be responsible for funding children of this state, or are we going in some other direction?" WHAT'S NEXT The next legislative session begins Jan. 11. South Carolina lawmakers will likely discuss eliminating property tax support for schools. Reach Karen Ethridge at (803) 648-1395, ext. 109 or karen.ethridge@augustachronicle.com.
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