State legislatures try to head off property tax revolt

But South Carolina politicians have a different 800-pound gorilla on their hands these days, according to State Sen. Chip Campsen, R-Isle of Palms.

Growth.

"Unless you address that, I don’t care what you do with property taxes," Campsen told a Dec. 15 conclave of area business and political leaders at Goose Creek’s Red Bank Club. The meeting, sponsored by the Berkeley County Chamber of Commerce, was a briefing on legislative efforts to reform property taxes.

Campsen said the influx of new residents to the Lowcountry represents one of the largest population migrations in history and "it’s no more evident than in Berkeley County."

"You have retiring baby-boomers from the Midwest, East Coast and even Florida coming here," he said. "And it’s not just retired people. Thanks to the Internet, I have a neighbor who runs his New York marketing firm from the Isle of Palms."

New residents typically hail from states representing 150-250 percent of the national per-capita income. And they’re relocating to an area that earns 83 percent of the national income. This kind of buying power is transforming the landscape, Campsen said, leading to gentrification that is affecting longtime residents from all socioeconomic levels. It is also straining governmental resources.

"On balance, residential growth does not pay for the public services needed for this kind of growth," Campsen said, noting that governments must find ways to have growth pay for itself.

"If something isn’t done, we’ll be like the Plains Indians financing the wagon trains coming in our direction," he said.

Meanwhile, rising property values are causing plenty of financial pain and taxpayer anger in Lowcountry households.

Consequently, property tax reform will be at the top of the agenda when the South Carolina Legislature reconvenes Jan. 6, according to Goose Creek Republican Shirley Hinsen,

"The No. 1 issue is property tax and then everything else," the House Chief Whip said. "That’s the general feel of the people, not only in Columbia and the representatives and senators, but the people that live in our communities. So that will remain our focus until we get something done."

House Majority Leader Jim Merrill, R-Daniel Island said he expects that legislators will eventually reach accord on property-tax reform.

"When you get down to it, it’ll be hard for anybody to vote against elimination of property tax for owner-occupied homes," he said.

Merrill said the property tax is the only tax mentioned in the state constitution, so any reform is going to need a supermajority of support, be loophole-proof, and be able to pass constitutional challenges.

The House Republican caucus is targeting eliminating property taxes on owner-occupied homes, which account for 15-20 percent of tax revenues, Merrill said. To offset this revenue loss, they are considering a 2-cent sales tax. Their counterparts in the Senate would reduce property and vehicle taxes and eventually taxes on food.

"But if we do nothing, we will have one of the largest tax revolts in the country," Merrill said.