Tuesday, Apr. 08, 2008

This study could make a difference — if legislators would OK it

ONE OF THE Legislature’s favorite dodges is to create a study commission.

Some actually produce recommendations that get turned into law, although often as not that’s because they were created not for the purpose of actually studying an issue but rather to legitimize what the sponsors wanted to do to begin with.

My favorite example of this occurred in the late ’90s, when then-Ways and Means Chairman Henry Brown established a tax study commission that spent months and produced thousands of pages of research material and actually adopted a smart set of principles that it said should guide any tax changes. It then recommended changes that were completely at odds with those principles, and so of course the Legislature adopted one of them.

More often, though, the end of study commissions is yet another dust-gathering report.

They are created as a compromise between those who actually want to do something on a given issue and those who don’t. The people who want action can tell their constituents (or patrons) that they got something done, and they can even hold out a sliver of hope that something will be done; opponents rest comfortably knowing they have blocked any action, at least for now.

That’s why we’ve had more than a dozen commissions that have recommended overhauling the government to give power to the governor. It’s why a new commission is created every few years — and often more than one is working at the same time — to study the tax system.

So while there is always debate over precisely who will appoint committee members, creating a committee is no big deal.

Unless it has some actual power.

Unless it can make a proposal that will become law unless the Legislature votes to block it. Unless the Legislature can’t even change the proposal — merely block it or let it become law.

This mechanism is modeled after the Base Realignment and Closure process that the Congress developed to break through the parochial logjam that had made it impossible to close unneeded military bases. It’s at once an admission of failure — we do not have the political will to do what we know should be done — and probably the only realistic hope for progress on a political problem that reaches that point.

It’s a powerful tool because it’s exponentially easier to stop a bill from passing than to pass one. A single senator can prevent the Senate from even debating a bill unless his colleagues vote to assign it one of a handful of priority slots, and even then that senator can prevent a vote on the bill unless a super-majority of his colleagues order him to stop talking — something senators are loath to do, lest it be done unto them.

So of course, creating a BRAC, as such mechanisms are called regardless of their target, is not as easy as creating a run-of-the-mill study panel. House Speaker Bobby Harrell and his colleagues have proposed BRACs for consolidating school districts and overhauling the tax code. The former was ignored; the latter passed the House in 2006 — after it had been defanged: It would make a proposal that couldn’t be amended, but it wouldn’t take effect unless the Legislature passed it.

But even BRAC Lite was DOA in the Senate.

And so it was worth noting when Senate Finance Chairman Hugh Leatherman announced to the Senate that he was ready to create his own BRAC Lite, which he calls the Taxation Realignment Commission, or TREC, to overhaul the tax code.

It is, he said, the only way to break the deadlock.

My colleagues and I came to the same sad conclusion two years ago, after watching the Senate deliberate for weeks over competing tax reform packages before giving up and passing an irresponsible plan that became even more irresponsible, and destructive, after it was worked through the sausage-grinder of a House-Senate conference committee.

The problem is that actually reforming the tax code means some taxes increase while others are reduced; whole new taxes (say, a sales tax on services) are imposed, while others are eliminated. Cutting taxes is easy, as the Legislature demonstrates on a nearly weekly basis, but suggest raising even one “and constituents come out of the woodwork, and we don’t get anything done,” Sen. Leatherman said.

His TREC is even more timid than Speaker Harrell’s; not only does the Legislature have to take affirmative action to implement its recommendations, but lawmakers could amend the proposal by a two-thirds vote. And its authority would be limited to state taxes, thus excluding the property taxes that still help fund the schools.

Sen. Leatherman pledges to get the bill out of his committee and push it on the floor “until the Senate finally says sit down and shut up,” although at this late date he acknowledges this fight will have to be rejoined next year.

The need for comprehensive tax reform is so obvious that nearly every legislator calls for it. And Sen. Leatherman argues that the need is growing each year.

“We put this tax on this year, we put that tax on next year, but we never have gone back and taken a comprehensive look at all of them,” he said. “I think part of the reason we’re in tough times is we’ve given this tax relief over here, that tax relief over there, and no one really knows whether we give the right amount of tax relief.”

As if to illustrate the point, the very next bill introduced after Sen. Leatherman’s was to add yet another sales tax exemption: “tangible personal property sold or leased to public schools and public school districts.”

A few minutes later, while the chairman was still chatting me up over TREC, the Senate passed a bill creating a $1.6 million-a-year tax exemption for manufacturers.

But I am a South Carolinian — while I breathe, I hope — and so even this sliver of hope for reform is worth grasping.

Ms. Scoppe can be reached at cscoppe@thestate.com or at (803) 771-8571.