Horry legislators set for session

Posted on January 11, 2010 
Filed Under News

Taxes, budget main items on S.C. agenda

Legislation that is highly sought-after by the real estate industry is first up on the state Senate agenda when lawmakers reconvene Tuesday, but a local member says the bill will not pass in its current form.

Local lawmakers are more optimistic, however, about chances for continued funding of the 2-for-1 tourism marketing matching grant and other boosts for tourism because visitors are a key piece of the state’s economy.

Legislators spoke last week about bills and budget items likely to be considered in the second year of the two-year session.

Taxes

On the measure known as the “point-of-sale” bill, the proposal seeks to cap at 15 percent any increases in the value of property when it changes hands. The real estate industry says the law - which requires taxing values to jump to up-to-date ones when property is sold - is stifling sales and running some business buyers to other states.

A busload of real estate brokers plan to visit the Capitol to urge favorable action on Wednesday, the time when the bill is most likely to be debated.

But the way it’s drawn, the point-of-sale relief bill will cost Horry County Schools $10 million and Georgetown County schools $4 million, said state Sen. Ray Cleary, R-Murrells Inlet. Some counties will get more than they currently receive.

Cleary, who represents parts of both counties, said the imbalance is large because of the current school-funding formulas. Those formulas punish districts, such as those along the coast, that are heavy with second homes by requiring them to provide more in local funds.

Cleary said he favors the concept of the bill, but that it has to be changed. Some senators also object to the loss of funds for city and county governments if the values are capped. There will be heavy debate on the topic, with multiple amendments and some filibustering, he predicted.

“I think it will pass, though, if everybody will compromise,” he said.

Members see little chance for wider-ranging tax reform legislation this year. A committee studying the topic is to report in March, but state Rep. Tracy Edge, R-North Myrtle Beach, said he heard they plan to ask for an extension.

State Rep. Nelson Hardwick, R-Surfside Beach, said there will be an attempt to overturn a resolution that passed last year forbidding the tax study committee from reconsidering Act 388, the 2006 law that substituted a penny of sales tax for property taxes to pay for school operating costs.

It doesn’t make sense to study the tax structure without looking at that part of it, he said. The law has caused several problems and is probably the worst legislation in state history, Hardwick said.

But the delegation, like other lawmakers, is split on that view. State Rep. Thad Viers, R-Myrtle Beach, believes Act 388 was among the best laws ever passed because of the large tax cut it gave homeowners.

Local governments need to learn to live within their means, he said, but he does think legislators should examine inequities in school-funding formulas.

Other lawmakers agree that Horry and Georgetown schools are adversely affected by school funding formulas but none had much hope of any action being taken on that front this year.

The budget

The legislative session is expected to be a gloomy one, dominated by lower revenues and the need to make still more budget cuts and possibly slash agencies and local governments even more than they were this year.

“I think, in all candor, the bulk of the legislative session is going to be dealing with the depth of the financial situation we find ourselves in,” said Rep. George Hearn, R-Conway.

“The time will be spent trying to figure out how we can develop some policies that will enhance employment,” he said.

Edge, who chairs the health care subcommittee of Ways and Means, said the budget will hinge on health care spending, and much of that will be dictated by what the federal government does. But he thinks it will be possible to continue some regular funds for Interstates 73 and 74, one of the local high priorities.

“Because of the budget problems, I don’t see us being quite as active on other things,” Edge said.

It’s an election year and that means legislators are leery of taking on any new controversial or high-profile subjects, Viers noted.

At the same time, legislators will be meeting in a shorter session, again like last year, to save money. Normally the session is 20 weeks, but members have already been told that four weeks will probably be trimmed, and there could be more. That cuts time for committee work on bills, forcing lawmakers to stick to what can and must be done, such as the budget.

Although not much other high-profile legislation is expected, Cleary said “one of the No. 1 issues” is early voting and a requirement for a photo ID to vote. The House passed those bills and he thinks they will pass in the Senate, though possibly not in time to be put in place for this year’s elections.

‘One bright spot’

The delegation believes that fellow lawmakers are willing to keep tourism funding in the budget despite the revenue troubles, and will be working to try to ensure that, members said.

“In a down economy, it’s important to maintain our advertising,” Edge said. He is a member of the budget-writing Ways and Means Committee and can help usher items onto the spending plan.

“It behooves the state to assist Myrtle Beach in restarting this economy,” Hardwick said. “We have become more and more reliant on sales tax, and it is down, and Myrtle Beach brings in a lot of sales tax. I think a good case can be made for that.”

“The one bright spot” in the state’s economy is its beautiful beaches, Hearn said, and the state can’t risk losing the stream of money those beaches attract.

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Zane Wilson