Lower property taxes may mean higher taxes elsewhere

COLUMBIA--Property tax relief could come with a price in South Carolina, legislators say. A Senate subcommittee looking for ways to keep property owners from being forced out of their homes by skyrocketing taxes agreed Tuesday to focus on possible remedies that could mean higher taxes elsewhere. The problem is the state's revenue is generated by what lawmakers refer to as a three-legged stool: property tax, sales tax and income tax. By reducing property tax, other taxes need to increase to provide government services. "Somebody's got to pay the bill somewhere down the line," said subcommittee co-chairman Glenn McConnell, R-Charleston. One idea under the microscope would eliminate property taxes by possibly raising the sales tax or other taxes such as cigarette tax to pay for state government. Another idea would limit services property taxes could be used to pay for, such as public education, which would be funded by another source -- a higher tax. But not all the proposals would cost more. One possibility would restrict property reassessment to when it's purchased or when a major improvement is made. Another would put a cap on how much the assessed value could increase over a period of time. "If you put in a cap system, you're not necessarily going to create less tax," said Sen. Scott Richardson, R-Hilton Head Island. "What you're really going to do is shift the taxes among those who are paying it in an individual county." Lawmakers have attempted to limit how much property values could increase during reassessments, but Gov. Mark Sanford said a better plan was needed when he vetoed the bill last year. Sanford had said the bill, which would have imposed a 20 percent cap on increases in property values on homes and businesses for tax purposes, was unconstitutional because it didn't tax property based on fair market value. McConnell said he expected the proposal to include changes to the South Carolina Constitution to bring property tax relief. "For us to do anything, we've got to have a constitutional amendment, otherwise the whole thing will be for naught," McConnell said. "We cannot leave this to the winds of the courts."

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