Politics & Government

Want tax reform? Put pressure on us, legislators tell SC business leaders

S.C. legislators told the state’s business leaders Tuesday that they need to pressure lawmakers if they want tax reform.

“Quite frankly, what we do and don’t do will be based on how much you push us,” state Rep. Gilda Cobb-Hunter, D-Orangeburg, told members of the S.C. Chamber of Commerce.

A bipartisan group of legislators said Tuesday they are ready to tackle tax reform during the two-year session that started this month. That reform effort is being led in the State House by House Speaker Pro Tempore Tommy Pope, R-York, and state Sen. Sean Bennett, R-Dorchester, in their committees.

What that reform will wind up looking like remains up for debate.

It could include lowering the state’s income tax rates or removing certain exemptions from the state’s sales tax. It also could include reforming Act 388, the S.C. law that shifted property taxes for school operations off of owner-occupied homes, putting that burden elsewhere, including on businesses.

There is not much disagreement the state’s tax code has problems, Bennett told a forum hosted by the S.C. Chamber, a powerful lobbying group.

“We’re not dealing with some piece of information out there that we’ve got to sell to” get passed, he said.

But passing tax reform is complicated, said Pope, adding his House committee has tried to tackle the problem for years, studying ideas ranging from wiping out all sales tax exemptions to making the state’s income brackets more fair.

“Our committee feels like ... that we’ve been practicing for a game that won’t ever” be played, Pope said.

But, lawmakers said, there is new momentum for tax reform this year, due, in part, to Republican Gov. Henry McMaster and the state’s business community.

“You should not underestimate your influence in this Legislature,” Cobb-Hunter said.

As an example, Cobb-Hunter cited the July 2015 debate to remove the Confederate flag from the State House grounds after nine black churchgoers were slain by a lone white gunman who posed for photos holding the Confederate flag.

“Were it not for pressure that those of you and across this state put on those of us who are blessed and highly favored enough to serve here, I doubt very seriously if the flag would have come down,” she said.

State chamber chief Ted Pitts said Tuesday he heard lawmakers loud and clear.

“We heard them, and we agree,” said Pitts, a former Republican state representative from Lexington.

Like education reform, Pitts said, “Tax reform is ... important if you, ultimately, want a competitive state environment for business, which brings jobs to South Carolina and allows families to grow and prosper.”

Nephron Pharmaceuticals chief executive Lou Kennedy, the chair of the state chamber, said she expects some “pain” during debate over tax reform. But, she added, “I’ll weather that storm with you.”

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Maayan Schechter (My-yahn Schek-ter) covers the S.C. State House and politics for The State. She grew up in Atlanta, Ga. and graduated from the University of North Carolina-Asheville. She has previously worked at the Aiken Standard and the Greenville News.