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COLUMBIA - A Senate subcommittee on Thursday rejected efforts to roll back
property tax assessments after realizing the proposal would hit most
homeowners with a tax increase.
Bill Gillespie, the state's chief economist, said the idea would shift taxes
"from the Battery to North Charleston, for example."
The rollback measure is part of a Senate bill that would make the so-called
point-of-sale the default system statewide. Under that system, property
would be reassessed only when sold, transferred or substantially improved.
The Senate proposal, crafted after months of meetings, also seeks to roll
back reassessed values to 2004 or earlier. Senators wanted to give tax
relief to homeowners who went through reassessment last year and saw their
property taxes skyrocket - the impetus of this year's drive for property tax
reform.
But the rollback also included a clause for local governments, allowing them
to increase the tax rate so they wouldn't lose money. That increase would
help owners of high-value property but hurt the average homeowner, state and
county officials told the subcommittee.
"It's really good we caught that, but I'm very disappointed. When my auditor
and assessor explained to us what would happen, I got a great deal of
heartburn. We can't sell that as relief," said Sen. Larry Martin, R-Pickens,
chairman of the Judiciary Subcommittee on the Property Tax Assessment Reform
Act.
Statewide, a reassessment rollback would decrease local government revenue
by $552 million, taking $183 million from owner-occupied homes and $369
million from commercial and rental properties. The corresponding tax rate
increase needed to recoup that would shift $106 million worth of taxes from
top-value homes to the rest, Gillespie said.
"We don't want a situation where none of the relief goes to those who need
it most," said Sen. Jim Ritchie, R-Spartanburg.
Martin said the only way to ensure a tax shift doesn't occur would be to
prevent local government from recouping the lost revenue, and "that would
truly be an assault on home rule."
Subcommittee members said they still want to throw homeowners a lifeline.
Assuming the General Assembly approves a change in the reassessment system,
the constitutional amendment would still require voter approval, so nothing
would change this year.
"Gentrification has reached all levels of society on the coast," said Sen.
Chip Campsen, R-Isle of Palms. "We need to come up with something else."
The subcommittee directed Gillespie to research what it would cost to give
tax credits to homeowners who saw their property values jump by 50 percent,
100 percent, 150 percent or 200 percent.
The reassessment change is one part of the General Assembly's two-prong plan
to reform property taxes. The other part, headed to the House Ways and Means
Committee, would swap property taxes on owner-occupied homes for an increase
in the sales tax.
Martin said it's important that the reassessment part stand on its own.
"We must work out a plan that will work even if the tax swap doesn't go
through," Martin said. "We want to provide optimum relief going forward."
The Senate subcommittee will meet again Wednesday.
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