A commission tasked with looking the state’s tax system should also be allowed to review 2006’s property tax relief package as part of its mandate, an Orangeburg representative says.

Rep. Gilda Cobb-Hunter says the state’s Tax Realignment Commission wants permission to review Act 388, the law that removed school operations from tax bills on owner-occupied property.

“I applaud the commission for asking us to let them look at the biggest obstacle to tax reform,” said Cobb-Hunter, a member of the House budget-writing Ways and Means Committee. “They seem to be suggesting to the General Assembly we are just spinning our wheels without looking at it.”

TRAC was created in 2009 to look at issues such as Internet sales tax collections, gasoline taxes and various exemptions. The legislation creating TRAC doesn’t give it the authority to review Act 388, but the Orangeburg Democrat said the law needs to be considered in any comprehensive review of the tax system.

A concession by Republican leaders to “tweak” Act 388 while holding firm to property tax relief isn’t workable, she said.

“My problem is we have tweaked too many times over the years,” Cobb-Hunter said. “It’s not fiscally responsible to continue a piecemeal approach to taxes by fixing a problem for special interests. Tweaking is not comprehensive.”

There seems to be little appetite for revisiting the law as a whole.

It is unlikely that the House will address Act 388 this session because 2010 is an election year, although Cobb-Hunter says the state’s revenue picture indicates “we need to do things differently.”

“It will take the public understanding the difference between tax relief and tax shift and stop believing the rhetoric,” Cobb-Hunter said. “We’ve provided relief for some at the expense of shifting taxes to others.

“In the small, rural counties where property values have remained constant, they are paying for tax relief for those who live along the water where property values are growing.”

At a recent gathering with the media, Senate Majority Leader Harvey Peeler said, “Increased taxes on owner-occupied homes is off the table.”

President Pro Tem Glenn McConnell agreed, but said he would be willing to go back and look at altering individual items in the law.

S.C. Association of Realtors CEO Nick Kremydas says his group wants to amend Act 388. They want to get rid of a provision that requires property to be taxed at its full value once it is sold.

“We have some serious concerns regarding point-of-sale assessment,” Kremydas said. “There are a number of circumstances in the law, such as new ownership or renovation or subdividing a tract of land, that trigger a reassessment to full market value.

“An unintended consequence is that these assessments are putting similar owner-occupied homes in the same area being taxed at vastly different rates. Some owners are wondering why one is paying more for (government) services than others.”

S.C. Chamber of Commerce CEO Otis Rawl, a North native, says his organization wants to repeal Act 388. He feels lawmakers don’t want to review the law because they are unwilling to admit it was a mistake.

He says people with second homes in areas like Beaufort and Hilton Head are making those their primary residences so they can get the tax break.

“That puts a bigger burden on local governments, who have to raise millage on businesses to compensate,” he said. “Small businesses especially can’t afford this burden. It sends the wrong message to businesses that are looking to expand in this state.”

n T&D Staff Writer Phil Sarata can be reached by e-mail at psarata@timesanddemocrat.com or by telephone at 803-533-5540. Discuss this and other stories online at TheTandD.com.

 

You must be logged in to comment.