Owner-occupied homes may owe nothing if plan advances
Although property tax bills already will be sharply lower this fall, some
Charleston County Council members are looking for ways to trim them even
more.
In May, the state's sales tax will rise from 5 percent to 6 percent, and the
income will be used to reduce school property taxes - by about 40 percent -
on bills mailed out later this year.
But in an unusual alliance, two county councilmen hope to push for a
referendum asking voters if they would approve yet another sales tax
increase, from 6 percent to 7 percent, if it could wipe out all property
taxes on owner-occupied homes.
County Council is expected to ask state lawmakers Tuesday to give counties
more flexibility to do just that. Council members gave the initial OK at
their Finance Committee meeting Thursday with a 6-3 vote. Chairman Tim
Scott, Councilman Henry Darby and Councilwoman Colleen Condon opposed the
move.
Councilmen Paul Thurmond and Teddie Pryor, who are from opposite ends of the
political spectrum, teamed up to raise the issue Thursday. "I know it looks
kind of odd, me and Paul. ... It's just the right thing to do," Pryor said.
Currently, counties have the option of raising their sales tax one percent
to provide more property tax relief to all property owners.
If it is approved Tuesday, County Council would send a resolution to the
General Assembly asking it to tweak the state code to say "one or more"
classes of property, instead of including all.
"Right now, if we do anything, we do it across the board. This gives us an
option," Thurmond said.
It's unclear whether state lawmakers will agree to the change - and whether
the county would hold such a tax referendum if they did.
House Speaker Bobby Harrell, R-Charleston, said he supports the idea, but he
doubts it will pass before the legislative session ends in early June.
Plus, there are some legal questions to consider, Harrell said, citing the
state Supreme Court's decision to strike down the county's former 15 percent
assessment cap for owner-occupied homes because it did not apply to all
classes of property.
"While it sounds like a minor change, it's actually a very big change
because of the constitutional implications," he said.
The council members who dissented Thursday said they were concerned the
change would shift the tax burden unduly from homeowners to those who rent
apartments or who own businesses.
Scott argued that homeowners already will see substantial relief this fall,
and he said heirs' property owners would be negatively affected because many
don't have clear titles proving ownership. No title would mean no direct
benefit from the tax break.
"Maybe they (state lawmakers) were smarter than we are this time around,"
Scott told his colleagues. "If we left it like it is, we would (encourage)
more businesses to do more business here. We would provide more incentive
and more security for those who rent, and we would still be giving an
additional discount - on top of the 40 percent discount - to those who own
their homes."
Mary Graham, senior vice president for public policy for the Charleston
Metro Chamber of Commerce, said the impact from the latest property tax
reforms has not yet fully set in.
"We would certainly not be in favor of making additional changes that may
further shift that burden to the business community," Graham said, adding
the proposed policy change plus a potential county sales tax hike would not
only harm local companies but would also affect lower-income residents who
can't afford their own homes.
Thurmond said a property tax break specifically for homeowners "is allowing
for an easier transition" to homeownership.
He also said the county should take advantage of its tourism-driven economy
by increasing the sales tax and lessening the burden on its residents.
Pryor said longtime residents, particularly the elderly, would benefit from
such a shift because "some of these folks can't afford to pay their taxes
and they lose their homes."
While their idea still faces a number of hurdles, both county councilmen are
hopeful.
"The reality is it's probably going to be next year before this gets on (the
ballot), and that's, in my opinion, best-case scenario. But we've got to get
the ball rolling," Thurmond said.
If you go
Charleston County Council is slated to approve sending a resolution on
property tax cuts to state lawmakers at its 7 p.m. Tuesday meeting, which
will be held at the Lonnie Hamilton III Public Services Building, 4045
Bridge View Drive, North Charleston.
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