A tax study committee will target sales-tax exemptions at its meeting later this month, the panel's chairman said.

The Joint Tax Study Committee will meet July 31. It is made up of three senators, three representatives and three people selected by Gov. Mark Sanford.

"There are an awful lot of exemptions I think are inequitable to some other taxpayers," said Senate Finance Committee chairman Hugh Leatherman, who leads the study committee.

The state needs more money to head off budget problems, said Leatherman, R-Florence.

He said the state will probably finish the 2003 fiscal year, which began July 1, with a deficit of $70 million. About $39 million of that will be paid by a reserve account, but it's unclear how the state will cover the rest, he said.

And the state's current $5.3 billion budget includes at least $300 million in spending tied to one-time funding sources that legislators will have to replace when they write the next fiscal year's budget, Leatherman said.

But raising revenue won't be a priority for House members of the study committee, said House Ways and Means Committee chairman Bobby Harrell, R-Charleston. "We would not want to simply use this as a means to increase revenue," he said.

Instead of tax-law changes, "we'll have to work our way through the budget again," Harrell said. He said it's too early talk about cuts in agency spending for this year.

Since December, agencies have suffered through two midyear budget cuts that sliced more than 8 percent from their spending plans. Some agencies started this fiscal year with budget cuts of 20 percent.