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Wednesday, April 12    |    Upstate South Carolina News, Sports and Information

Senate wrestles with property taxes
Day ends with no vote as legislators debate shifting more to a sales tax

Published: Wednesday, April 12, 2006 - 6:00 am


By Tim Smith
STAFF WRITER
tcsmith@greenvillenews.com

COLUMBIA -- Homeowners' hopes for property tax relief this year went to the Senate floor on Tuesday, where little in the way of a consensus emerged after the opening debate.

Senators representing high-growth counties and those with rising property values complained that a Senate plan didn't offer enough relief. Others complained that the plan offered little help for the poor. And still others warned that a competing House plan would "whack" business with higher taxes and possibly affect tourism.

Even the senator explaining the bill told colleagues that he favored something else. But defenders of the plan told senators that the House reform package wasn't an option.

"Is this plan perfect? No," said Sen. Scott Richardson, a Hilton Head Republican. "There is no perfect formula that fits 46 counties. Let's start with something, at least at a place that makes sense."

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The Senate adjourned before taking any votes. Debate is expected to resume today.

The Senate Finance Committee last week sent a plan to the floor as a means of replacing the House plan. Senators said then they hoped that floor debate would craft a compromise.

The Senate plan under review would raise the state sales tax by a penny, from five cents to six cents per dollar. The proceeds would fund relief of school taxes for owner-occupied homes valued at $180,000 or less. Car owners also would see school taxes removed. The plan also offers a "circuit breaker," which would limit tax bills to 5 percent of household income.

The House plan would raise the sales tax by two cents and remove school, city and county taxes from owner-occupied homes, leaving only local debt on tax bills.

John Simpkins, a professor at the Charleston School of Law, said reaching an agreement on property tax this year might prove as difficult as immigration reform for members of Congress.

"What we're seeing now is evidence of why we haven't had successful efforts at reform in this area in the past," he said.

"It creates a cross-cutting dialogue where you might have representatives of high-growth areas taking positions which are counter to representatives of poor areas. And party designations don't necessarily hold."

Senate President Pro Tem Glenn McConnell, who represents Charleston and its steep property values, was among the first to attack the plan.

"If it's 'Deal or No Deal,' we'll take the House bill," he said.

McConnell and other coastal senators said the House plan offered more relief to homeowners in their districts, who include seniors whose incomes are topped by their tax bills. Charleston County is among seven counties, senators said, where a majority of homes are valued in excess of $100,000.

Sen. Wes Hayes, a Rock Hill Republican who explained the plan to the Senate, argued that the House plan would hurt Charleston business and tourism.

"I will say the Senate plan is vastly better than the House plan," he said. "This bill does nothing to hurt business."

Sen. Ralph Anderson, a Greenville Democrat, complained that the bill appeared to be a "Robin Hood in reverse," taking sales taxes from the poor to give to more affluent homeowners.

And Sen. Chip Campsen, an Isle of Palms Republican who attended public hearings last year on property tax reform, criticized the fact that half the plan's money would go for car tax relief.

"One thing I did not hear (from the hearings) was people getting taxed out of their cars," he said. "What I heard around the state was people getting taxed out of their homes."

Some said Tuesday that with a proposal already approved that would cap reassessment increases and one still being debated that would cap tax rate increases by local governments, the Legislature might accomplish significant property tax reform without any further action.

Hayes said afterward he believes the Senate will sift through four options before deciding what to do: the current plan, the House plan, a proposal he favors to only raise sales taxes by one-half cent and a plan to give counties an option to raise the sales tax for property tax relief.

He said the one-half-cent proposal favored by him is also favored by business and local governments but would likely not satisfy coastal senators.

"I don't see any clear preference," he said. "I think it will come down to the one-half and the 2 cents. But I don't know where the votes are, to tell you the truth."


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WHAT IT MEANS
  • The Senate plan under review would raise the state sales tax by a penny, from five cents to six cents per dollar. The proceeds would fund relief of school taxes for owner-occupied homes valued at $180,000 or less.

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