Lower, flatter and fairer state taxes will the goal of the S.C. House when lawmakers return to Columbia next January.
As legislators returned Tuesday to approve a budget for the state’s fiscal year that starts July 1, a special S.C. House panel said it will resume its work on changes to the way that the state taxes its citizens.
“Our next step, at the end of the summer, will be to … roll up our sleeves,” said S.C. House Speaker Pro Tempore Tommy Pope, R-York, who chairs the S.C. House Tax Policy Review Committee.
That special panel of House members received an overview Tuesday of the state’s new gas-tax law, which includes some tax cuts and rebates.
The gas-tax increase grew out of a similar panel that, like the tax committee, was appointed by S.C. House Speaker Jay Lucas, R-Darlington.
The tax panel began meeting last fall but paused its work so legislators could focus on the gas-tax bill during the Legislature’s new shorter session, Pope said.
Issues that committee members have identified to focus on include:
▪ $3 billion a year in exemptions to the state’s sales taxes, covering items from farm machinery to prescription medicine. Critics say many of those exemptions should be abolished.
▪ The state’s misleading top income tax rate, which, some say, scares off investment. On paper, that top rate is 7 percent. However, after deductions and exemptions, S.C. taxpayers actually pay about 3 percent, one of the lowest rates in the nation.
▪ The notorious Act 388 property tax law that exempts owner-occupied homes from paying operating taxes for local schools. That law unfairly shifted school taxes to commercial and rental properties, critics say.
▪ The state’s regressive 6 percent state sales. That sales tax is the 16th highest in the nation, according to the Tax Foundation, and often is increased even higher by local option and hospitality taxes.
The formal tax plan that emerges from the tax panel could be a comprehensive reform proposal, separate bills to address various issues or a set of recommendations, Pope said.
Budget on governor’s desk
Meanwhile, as expected, lawmakers gave final approval Tuesday to the state’s budget, including its focus on shoring up the state’s underfunded pension system.
Lawmakers are unlikely to return to Columbia again this year unless McMaster vetoes significant budget items.
Also, on the session’s last day ...
Budget restores Public Safety director’s salary
The final version of the state budget that takes effect July 1 restores the salary of Department of Public Safety director Leroy Smith.
In its version of the budget, the S.C. House voted to strip Smith of his salary. Representatives were displeased with Smith’s management of the Highway Patrol, citing poor morale and rising road deaths.
Because only Gov. Henry McMaster directly can fire Smith, the House proposed eliminating Smith’s post and pay. Smith was appointed by then-Gov. Nikki Haley in 2012.
Legislators OK stripping college agency of power
A proposal stripping a state agency of much of its authority to review college construction projects will become law unless it is vetoed by S.C. Gov. Henry McMaster.
Barring a veto, the Commission on Higher Education on July 1would lose its ability to review colleges' proposals to renovate existing buildings or construct new athletic stadiums, dorms, parking structures.
Earlier this year, several college presidents labeled that oversight as a needless and "burdensome" layer of bureaucracy. They noted that college trustees and other state oversight boards already must approve the projects.
In a statement, the University of South Carolina praised the action. “As President Pastides said, this is a significant first step in restoring our state’s commitment to higher education. We look forward to continuing the conversation about investing in our state’s economic future through higher education.”
Commission leaders have said the proviso would squash their agency's efforts to rein in ever-increasing higher education costs for S.C. students and taxpayers.
Senate OKs new Ethics commissioners
The state Senate approved nominees Tuesday for the newly reconstituted State Ethics Commission, allowing that agency to get to get to work overseeing the campaign and ethics filings of S.C. elected officials.
The eight commissioners were nominated by Gov. Henry McMaster, and S.C. House and Senate Democrats and Republicans.
The House previously had approved the nominees.
— Cassie Cope, Avery Wilks and staff reports