The state's high court Monday shot down Charleston County's latest bid to provide tax relief for those whose home values and tax bills have soared.

The issue involved a controversial reassessment cap that would have limited to 15 percent the amount property could appreciate on the tax books. The move was designed to provide relief to residents in downtown Charleston and the sea islands, many of whom are paying thousands of dollars more per year than they did a decade ago.

Battling the cap were residents of North Charleston, who would have to pay more under a cap to offset the breaks given to other homeowners. The city sued the county over the legality of the cap.

The high court's decision was unanimous. The justices' two-page ruling said the cap was not valid because it didn't apply statewide.

Those now hoping for tax relief must look to the General Assembly, which is exploring several tax relief options this year.

State Sen. Pro Tem Glenn McConnell hoped the ruling would spur lawmakers to get busy. "I hope it will get the Legislature more aggressively focused on property tax reform," said McConnell, R-Charleston. "I think these pending lawsuits have made it difficult to move forward."

The decision sabotaged the county's second effort to enact a reassessment cap. The same court also shot down the county's 2000 effort to apply the 15 percent cap because it applied only to owner-occupied homes. That decision forced the county to refund more than $9 million.

The county retooled its ordinanceto apply to all property owners, and Charleston County Council had hoped to apply the new cap this year.

Council members said they were disappointed, but not surprised, with Monday's ruling. The council plans to discuss its next step as early as Thursday. The county is supposed to reassess property this year but could delay it a year.

Chairman Leon Stavrinakis asked state lawmakers to come up with another way to ease the property tax burden. "I hope they do something that brings some common sense to the existing system that doesn't exist right now," he said. "It is long past time for this terrible system to be reformed."

Mayor Keith Summey was pleased with the Supreme Court's decision but sensed the war over property tax reform wasn't over. "We always expect the dragon to stick its head out of the hole again," he said.

County Councilman Ed Fava wasn't sure if the county would delay reassessment but said, "If it can be done efficiently and properly, I don't know why we would delay."

While the last two reassessments hit hardest for those owning property in downtown Charleston and on the barrier islands, the next might be felt most acutely by owners of rural parcels on Johns, Wadmalaw and Edisto islands.

North Charleston resident Bob Henderson, a vocal opponent of the reassessment cap, said his calculations show the cap would have raised taxes on his Wando Woods home by about 30 percent. He welcomed Monday's ruling.

"It will help the poor people," he said. "What is the logic behind shifting taxes from someone south of Broad who lives on a fixed income to shifting the burden to someone in North Charleston who lives on a fixed income?"

Gene Geer, who has seen the tax bill on his East Battery home rise from $3,000 in 1993 to $14,000 last year, was disappointed the court had scuttled yet another possibility for relief.

"It is reaching the point where people are selling their houses because they feel they can't afford to pay these excessive property taxes," he said.

"If the cap is not going to work, then we'll have to find another way."

North Charleston lawyers, who filed the suit nearly two years ago, argued that roughly 97 percent of 67,282 taxable properties in the city, from cars and boats to homes and businesses, would face higher tax rates if the cap were put in place. In court filings, the lawyers also said about 89 percent of 497,320 taxable properties countywide would face higher taxes if the cap is approved.

North Charleston City Council members, some of whom were plaintiffs, were excited by the outcome. "We were right all along," said Councilman Bob King. "You can't treat one taxpayer different than another. It is a fairness issue."

The court's decision, however, doesn't necessarily end the tax cap idea. Last June, the General Assembly approved a bill capping values at 20 percent in all 46 counties, though Gov. Mark Sanford vetoed that bill several months later. He said the cap appeared unconstitutional and would take money from most of the state's school districts.

State Rep. Vida Miller, D-Pawleys Island, pushed for the 20 percent cap and said she believes it still is constitutionally OK.

"We asked that the governor not veto it so we could take it before the Supreme Court to find out if there were problems," she said Monday.

"I think that's the greatest travesty; we still don't know."

McConnell said if lawmakers want a reassessment or valuation cap, they should push for a constitutional change.

"At this point, if we want to do a cap, then we've got to put it to the voters in a constitutional referendum," he said. "Why waste two more years?"

RECAPPING THE CAP

1999: Gov. Jim Hodges signs a bill allowing counties to cap residential property reassessment increases at 15 percent. The bill was pushed by Charleston-area lawmakers responding to complaints about soaring tax bills in downtown Charleston, on the beaches and elsewhere.

2000: Charleston County Council becomes the first county to adopt a 15-percent cap, but it enacts a modified version. Instead of applying the cap to all real property, it chooses to apply the cap only to owner-occupied homes. The state attorney general's office says the alteration is legal.

2001: Charleston County reassesses property with the 15-percent cap on owner-occupied homes, even though a lawsuit challenges the move. The cap shifts almost $10 million from taxpayers whose homes soared in value to other taxpayers.

May 2002: The state Supreme Court throws out Charleston County's modified cap, and the county begins a protracted legal battle about how to make refunds to taxpayers who paid more the previous year.

October 2002: Tax bills mailed in the fall are calculated with no cap, and many homeowners see big increases.

March 2003: County Council approves extending the 15-percent cap to all properties, not just homes, and later agrees to pursue a lawsuit with North Charleston to clarify the constitutionality of such a move.

June 2004: In a last-minute vote, state lawmakers agree to cap all property value increases at 20 percent during a reassessment year. Gov. Mark Sanford later vetoes the bill.

August 2004: County Council agrees to pay $9.7 million in reassessment refunds, plus more than $1 million in interest. Homeowners must apply for the refunds.

April 2005: The S.C. Supreme Court unanimously rules that individual counties can't adopt a reassessment cap.

 

WHAT IT MEANS

The 15-percent cap would have meant a break to many homeowners and commercial property owners whose property values have climbed sharply. Others, including owners of cars, boats and other personal property, would have paid slightly more to ensure that cities, county government and the school district received about the same amount of property tax income.

Charleston County is scheduled to reassess all homes, stores and office properties either later this year or next year. County Council already had voted to put a 15-percent cap on the amount an individual property's value could rise for tax purposes.

Monday's state Supreme Court ruling scuttles that plan, meaning that the county's next reassessment will operate much like previous ones.

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