SC Lawmakers Worry About Property Tax Change Impact on Homeowners

COLUMBIA, S.C. (WSPA)—Members of the South Carolina House Tax Policy Review Committee are worried that lowering property taxes on businesses and commercial property to the same rate homeowners pay would hurt homeowners.

Tuesday the committee heard that one scenario would decrease state revenues by $569 million. Rep. Joe Daning, R-Berkeley, asked, "And then we're going to increase owner-occupied homes by $250 million to offset that decrease?"

Rep. Joe Jefferson, D-Pineville, told the committee that all the members of his county council who voted for a tax increase were just voted out in last week's elections.

The discussion stems from complaints about Act 388, the 2006 state law that lowered property taxes for homeowners. It removed from their property taxes all of the costs of operating local schools. The state sales tax went up a penny to offset the lost revenue, but that extra penny hasn't kept up, so the state has had to use general fund money to make up the difference. And since local school districts can't raise property taxes on owner-occupied homes, business and commercial properties have seen their property taxes go up.

Rep. Tommy Pope, R-York, chairman of the committee, says, "You know, it's easy to go, politically, 'I'm going to fix Act 388.' And now we see what it entails, there's some hard decisions that have to be made."

He says homeowners, including himself, have benefited from Act 388, so leveling the playing field for businesses could arguably raise property taxes on homeowners.

The committee is also studying the state sales tax. The goal is to be able to lower the sales tax by broadening it, charging it on things that are now exempt from the sales tax. That means you'd pay the sales tax on things you don't now, such as services, but you'd pay a lower rate, possibly 3 percent instead of 6.

The committee has not reached any decisions yet about what it will recommend to state lawmakers, who start a new legislative session in January.

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