August 05, 2005

South Carolina: Mark Sanford Asks the Hard Questions

Well, who knew? Turns out that before South Carolina lawmakers start cutting property taxes, they should probably think about the impact this would have on school funding. SC lawmakers have been meeting informally this summer to discuss options for relieving property taxes in fast-growing areas when they convene next year. Speaking to a local Kiwanis club this week, Governor Mark Sanford had this to say:

"If you want relief ... then how are we going to do it in a way that still provides adequate funding for the education process?"

To which one Senate leader had this response:

"We are not going to ignore education, but I'm just not going to put the property owners on the back seat," said Sen. Glenn McConnell, R-Charleston. "People's homes are at stake, it's time to act."
One shouldn't have to congratulate elected officials for asking the sort of basic questions Sanford is bringing up, but in the current climate that's the way it is. Good job, governor.

The classic bait-and-switch anti-tax lawmakers tend to pull with property tax reform is telling the public and the media that it's all about saving elderly homeowners who are in danger of losing their homes-- and then enacting big-time property tax cuts that benefit even the wealthiest homeowners. You can see the beginnings of this in McConnell's quote above. It's very likely true that "people's homes are at stake," as he claims, because property taxes are going up fast in certain areas of the state and some low-income homeowners will have real trouble paying these growing bills.

But with that kind of rhetoric, you would think that the proposed remedy would specifically target the folks whose homes really are "at stake." Right now, it's not looking that way. The most frequently-mentioned proposal would completely repeal local property taxes for education and replace them with sales taxes. In the understatement of the week, an AP article notes that "It would be tough to eliminate property taxes because, on average, they provide 84 percent of local funding to the state's school districts."

Even the less costly reforms being discussed would have their bad side. If, as some have suggested, the state simply caps the growth of taxes on homes in fast-growing areas, this just means that the cost of funding services will be shifted away from people whose property values are high and growing, and toward people living in low-valued, low-growth homes.

Once again, Gov. Sanford is right on the money:
"You've got an equity lawsuit about some counties in some of the rural parts saying 'Wait, we don't have enough,' " Sanford said. "You want to be careful to make sure any of these proposals that they're trying to limit property tax for the big homes on Sullivans Island ... that you're not therefore loading up more tax on some guy living in a trailer in Hampton County."
Amen to that.


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