Originally created 02/22/06

Senate considers trading property tax for sales tax



COLUMBIA - A Senate subcommittee on Tuesday received a review of a House plan to swap most property taxes with an increase in sales taxes.

The panel took no vote and adjourned after getting an explanation of the proposal approved by the House two weeks ago.

The House plan would raise the state sales tax from 5 cents to 7 cents, except on groceries, in exchange for removing all school, city and county operating costs from the tax bills on owner-occupied homes.

The 2-cent sales tax increase would not cover the cost of the whole plan, which is expected to be $116.8 million the first year and $396.4 million by 2009-10.

Senators openly dislike the plan, but the panel chose to wait until its next meeting, likely next Tuesday, before deciding how to proceed.

"We obviously can't go forward with a bill $120 million out of balance," said Sen. Scott Richardson, R-Hilton Head Island.

The senators, who unlike House members don't face election in November, seem to be in no hurry.

The panel's chairman, Sen. Wes Hayes, R-Rock Hill, said the goal is to send a plan to the Senate Finance Committee by March 28. Mr. Hayes, a member of the Senate panel that studied the issue for months, has consistently opposed the idea of a tax substitution.

But Mr. Hayes said he's "committed to trying to find the best bill I can."

Mr. Hayes does support changing the way property is reassessed, a piece of the House plan the Senate dealt with separately. Earlier Tuesday, the Senate gave final approval to its version of reassessment, which if approved by voters, would limit how much property values can go up for tax purposes.