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COLUMBIA - The Senate gave initial approval Tuesday to a bill that spells
out what would happen if voters decide to change the way property is
reassessed, another of the various measures designed to provide property tax
relief to homeowners in the state.
Under a proposed change to the constitution, voters would decide in November
if they want to keep the current reassessment system or limit how much
property values can go up.
If voters choose the cap, property values could not rise more than 15
percent every five years. The limit would not apply to property sold or
transferred between the reassessment cycles. Those properties would be
assessed at the sales price.
Property that is added on to or renovated would also get reassessed between
cycles. The cost of the improvement would be added to the value. General
maintenance and repairs would not trigger reassessment.
The bill is expected to receive final approval in the Senate today.
The Senate also will take up a measure today that includes the ballot
question to be put before voters in November. Changing the constitution
requires a two-thirds approval by the General Assembly.
"It's a pure right-to-vote bill, a give-the-people-the-choice bill," said
Senate President Pro Tem Glenn McConnell, R-Charleston.
If voters approve capping assessments, they would return to the polls in
November 2007 to decide on a county-by-county basis whether to opt out.
Voters could switch systems again after five years.
"Voters always ought to be the ultimate decision makers," said Sen. Larry
Martin, R-Pickens, who led a subcommittee that crafted the legislation.
An attempt to change the bill to point-of-sale reassessment, where property
is reassessed only when sold or improved, failed. The House passed that kind
of reassessment last week as part of its plan to provide homeowners tax
relief.
The House plan would also cut most property taxes from owner-occupied homes
by increasing the state sales tax from 5 cents to 7 cents. That tax-swap
measure is headed to a Senate finance subcommittee led by Sen. Hugh
Leatherman, R-Florence.
"We want to make sure we do this right and not rush through it," Leatherman
said. "It won't leave my Finance Committee $100 million out of balance."
According to the state's chief economist Bill Gillespie, the House plan
would cost the state $116.8 million the first year, $248.5 million by the
second year and $396.4 million by 2009-10.
Unlike the House, the Senate wants to pass its property reform package in
pieces, in what McConnell calls clean bills that don't cram issues together.
Also, state law also requires that any measure affecting state revenue
originate in the House.
Leatherman said his subcommittee will hold its first meeting on the
tax-swapping bill next Tuesday. Senators, who don't hide their dislike of
the House plan, will then tweak it to their liking. Leatherman hopes to send
a new version to the Senate floor before senators begin debating the 2006-07
budget in April.
House and Senate members will try to reach a compromise on their differing
tax plans in conference committee.
Some senators have openly speculated whether the two chambers can agree on a
tax substitution plan in a year when all House members face re-election and
senators don't.
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