Sound Off on Tax Swap Plans Today

MB chamber forum should prepare legislators to look out for us in Columbia this year

Can Grand Strand business owners and residents count on local legislators to look out for their interests during the upcoming General Assembly debate over property taxes? If the leaders of the Myrtle Beach Area Chamber of Commerce get their way, the folks we elect to represent our interests in Columbia will regard the two property-tax reform proposals now in play with skepticism.

To make sure that legislators get the message, the chamber today is hosting a public forum on the property-tax proposals, both of which would eliminate residential property taxes in return for 2-cent sales tax increases. The legislative delegations from Horry and Georgetown counties are invited to attend, as are government, public school and business leaders. Readers also are invited to attend the two-hour forum, which begins at 10 a.m. in the Myrtle Beach Convention Center.

Those who attend will hear a state Chamber of Commerce overview of the tax plans and a summary of the state chamber's analysis of the plans' likely effects on S.C. business and industry. Conducted by former state economist Harry Miley, the state chamber analysis found that the tax shift proposals, one in the S.C. House, the other in the S.C. Senate, both would increase the tax burden on business and industry and hurt the state's competitiveness.

Miley also found that both proposals would have profound negative effects on Horry County. Some businesses, he said, would relocate rather than pay higher sales taxes. Beyond that, as Myrtle Beach chamber President Brad Dean has noted, enactment of either plan would weaken the Horry County economy.

Here's why. Our county already sends most of its sales tax revenue to other S.C. counties because the sales tax is dedicated entirely to support of S.C. public schools. A relatively small amount of that money returns here to support the Horry County Schools.

Further increasing the sales tax bite, while depriving the Board of Education of the ability to raise operating money from the residential property tax base, would harm local public schools - at present among the best in the state. Moreover, the House plan also would undermine municipal and county councils' ability to finance their operations from the residential tax base. All local governments would have to depend on sales tax handouts from Columbia to finance their operations. There's serious doubt whether adding 2 cents to the sales tax would raise enough money to replace the lost property tax revenue.

Meanwhile, local businesses and industries would continue to pay commercial property taxes. That's the source of Miley's finding that enactment of either plan would shift more of the tax burden to business and industry - madness in a state that already has trouble attracting new businesses.

Our local legislators have gotten an earful from homeowners unhappy that last year's statewide property reappraisal raised their property valuations while Horry County Council also raised its millage about three points. Some of those good folks may deserve relief.

But it would be madness to relieve them by making the state's tax climate less friendly to business and sapping Horry County's strong tourism economy. Local legislators need to get an earful about that today, in order that they meet the interests of all the home folks during the 2006 legislative session.

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