Beaufort County legislators have dusted off and massaged a proposal vetoed by Gov. Mark Sanford because it didn't meet the constitutional requirement that all property be assessed and taxed at fair market value.
Rep. Richard Chalk, R-Hilton Head Island, and Rep. Bill Herbkersman, R-Bluffton, have sponsored a bill to cap a property tax increase at 15 percent. For instance, if a taxpayer paid $1,000 in taxes before reassessment, the tax couldn't rise beyond $1,150. The tax is an alternative to the 20 percent cap on property reassessments that Gov. Sanford vetoed.
Soon the full House and Ways and Means Committee will discuss a bill that would lock property values on a home at current assessment until the house is sold unless additions or improvements were added. For instance, if someone buys a home for $100,000, the home would remain on tax rolls at that value until sold. If the house sells for $200,000 five years later, that would be the new value for tax purposes.
Both measures run counter to the constitutional provisions. The 15 percent tax cap violates the provision that property be taxed at fair market value. It also shifts the burden to finance local government to others. Rep. Thayer Rivers, D-Ridgeland, said the plan doesn't answer the problem of increasing tax bills for other property owners to make up for lost revenue in capping taxes on properties that appreciated greatly in value. The South Carolina Association of Counties shares the concern. The Constitution requires that property be taxed at a fixed percentage of its fair market value, the group said.
Locking property values at current assessment or selling price ignores the mandate that reassessment must occur every five years.
A state chamber of commerce study released during the 2004 legislative session dovetailed with the findings of a Clemson University study that said the tax burden would be shifted from the wealthy to the middle class and small business owners.
Government leaders need to take a step back and rethink the issue.
Last session the state chamber said that data provided by the S.C. Department of Revenue and Education show that the 20 percent assessment cap would affect 82 of 84 school districts. Only Beaufort and Charleston would benefit. The state Index of Taxpaying Ability would send less money to every school district.
The goal of helping longtime property owners and those on fixed income or in the lower-income bracket to keep their homes is noble. But changes must conform to the state's Constitution, which bases assessment and taxes on fair market value.