S.C. Statehouse Report
Sunday, Feb. 12, 2006
VIEW: http://www.statehousereport.com/columns/06.0212.insanity.htm


Slow down, listen to experts on property tax reform
By Andy Brack
Publisher
SC Statehouse Report

FEB. 12, 2006 - - For Albert Einstein, the definition of insanity was continuing to do the same thing over and over while always expecting different results.

With state lawmakers rushing toward passing property tax reform, maybe South Carolina deserves a new definition: significantly reshaping the state's tax structure while ignoring a whole bunch of smart people who say it's a bad idea.

As state senators take up property tax measures following a bill that zipped through the House, they should consider more than the rowdy bunch of property tax reform zealots who want short-term pleasure at the expense of long-term pain. Senators need to look at the overall message the state sends if it essentially replaces most residential property taxes with a 2 cent hike in sales tax. And they need to listen a little more closely to the business community.

First, the message: If the state approves property tax reform as proposed, it's going to stymie the state's job recruitment efforts. Sure, South Carolina would have one of the lowest property taxes in the nation. But at the same time, it would have one of the highest sales taxes in the nation at 7 cents per dollar spent.

For a state where job growth is lowest in the country, adding another disincentive for businesses to move here just isn't smart. What are recruiters going to tell potential employers - - "Just move to South Carolina where we have the some of the highest sales taxes in the nation?"

For businesses, the extra 2 cents will be crippling and raise the share of property taxes they pay from 42 percent of the whole to 47 percent, according to the SC Chamber of Commerce. The organization also says changing the tax structure would increase the tax burden on businesses by $490 million. Just who do the zealots think would pay that increase - - customers!

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Next, the listening: Editorial writers and businessmen have been pounding the opinion pages about how a huge shift in the way South Carolina funds government might not be the smartest long-term solution for the state. A sampling:

The impact: "The tax reform legislation the House will debate this week helps rich school districts maintain their edge, forces the poor and middle class to pay for tax cuts for the wealthy, shifts the tax burden onto businesses, sets the state up for revenue shortfalls in years to come and intrudes on the ability of every community in this state to decide what level of local services it will have," editorial in The State newspaper.

Business burden: "This is a recipe for disaster that places an unfair burden on the business community. If businesses can't prosper, South Carolina surely cannot," Columbia businessmen Lee Bussell and Jim Reynolds in The Myrtle Beach Sun News.

Study more: "No aspect of state government needs a more thoughtful approach or more expertise than the state's fiscal underpinning, down to the local level of government. Better to give the proposed [property tax] study commission the priority of analyzing the property tax relief measures now on the table than take a chance that its biggest job next year will be looking for solutions to this year's bad tax mistakes," editorial in The Georgetown Times.

Slow down: "As they head into this debate, spurred on by angry homeowners, SC legislators should resolve to follow the ancient physician's maxim: First, do no harm," editorial in The Myrtle Beach Sun News.

Let's hope the state Senate will exercise its traditional leadership role to cool the passionate stirrings of the SC House.

There's more than one way to reduce property taxes - - raising the our nationally-lowest cigarette tax or boosting our fourth-lowest gas tax or removing the billion dollars of sales tax exemptions or broadening the revenue base by taxing services.

But the real debate that needs to go on isn't how to satisfy irked homeowners. The real debate should be to do what's right for most South Carolinians after a long look at the whole system.

lighter side
2/12: What can happen to cartoonists

Another great cartoon from Bill McLemore:

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feedback
2/9: Students oppose tuition caps

To the Editor:

The South Carolina State Student Association, a student-funded, student-directed organization representing over 65,000 public university students across South Carolina, opposes Gov. Sanford's tuition cap proposal. SCSSA also expresses dismay that on Thursday, the higher education subcommittee of the Ways and Means Committee adopted a tuition cap.

Everyone supports affordable tuition, but there is a difference between good rhetoric and good policy. Sanford's tuition cap proposal is bad policy for the students and families of South Carolina.

Sanford continued his push for the proposal on Wednesday with a press conference, claiming that recent tuition increases were a result of "of the duplication and inefficiency within the higher educational system." SCSSA maintains that the more fundamental problem is the lack of sufficient state funding for higher education.

Meghan Hughes, SCSSA vice chair and a junior at USC noted that "from 2000 to 2005, state funding for Higher Education decreased by over 20%," adding that "until state funding is restored to appropriate levels, forcing universities to cap tuition will decrease the quality of our institutions."

SCSSA will continue communicating their concerns with state lawmakers and are pleased that students will have a seat at the table at the governor's task force.

-- Kely Sheldon, President, SC State Student Association
Junior, Clemson University

2/5: Take a look at ethanol too

To the editor:

Always enjoy your articles. I read this morning your discussion on a hydrogen economy. It was very informative; but we need to insure the yellow rock isn't fool's gold. Those tomatoes and bushes may be worth more than the rocks. I believe S.C.'s, and the nation's, best bet is through ethanol production. Is anyone in SC even looking at this? The first article below is worth reading.

2/5: Look at America's energy needs

To the editor:

An op-ed piece written by Peter Huber (Manhattan Institute) appeared in the Wall Street Journal of February 3rd. It is probably the easiest to understand discourse I have ever read on America's energy needs and sources. I was so impressed that I wrote an review of some of the statistics for some friends and colleagues I communicate with. What is useful in his analogies is that he equates all energy sources and needs in terms of oil (BBO=Billions of Barrels of Oil) and equivalents of energy sources and needs in oil (BBOE=Billions of Barrels of Oil).

What I also want to pass on to you is what he said about Hydrogen. To wit:

"The President also reaffirmed his support for the ambitious hydrogen technology program he announced in 2003. Over the longer term, hydrogen might indeed emerge as a third bridge between the electric and transportation sectors, serving as a battery-like storage medium to power cars. But the 0.1 BBOE a year of hydrogen that we currently produce (for industrial uses) costs four to eight times more than North Sea oil, and is 10 times more expensive to store. (emphasis added) And, the hydrogen comes either from natural gas, or from water split apart with electricity. Which leads us back again, directly or indirectly, to coal and uranium."

I guess an optimist could draw from this an opportunity, sometime in the distant future, that hydrogen might play a role, albeit a small one, in energy needs for cars. Going back to Huber's article, it seem prudent to first solve the problem of converting our use of natural gas to produce electricity and heating our offices and homes to producing that electricity from clean coal and/or nuclear.

-- Tom Hatfield, Hilton Head Island, SC

2/5: Hydrogen column misleading

To the editor:

I was disappointed to read your column [Commentary, 2/5] on hydrogen in today's newspaper, The Island Packet. It gave the reading public the wrong idea on hydrogen. The column gives the opinion that you take hydrogen and use it as an energy source. This just is not true.

Hydrogen is a method of storing energy in a usable form, gas. Electrical energy is used to disassociate water into Hydrogen and O2. It takes 2 Faraday's of electrical current to produce one mole of hydrogen. Then the hydrogen can be burned in any number of ways to get back the stored energy. You can direct the hydrogen into a fuel cell to convert the energy stored in hydrogen into electrical energy to power the automobile. Or, you can direct the hydrogen into a conventional internal combustion engine (automobile) the same way we use propane today.

However, first you must have a source of electrical energy to produce the hydrogen. We do not have the electrical generating power plants in the United States to produce the electrical energy for hydrogen generation. The Department Of Energy (DOE) has stopped all proposals so as to save oil and coal power generating. For instance: The glass industry stopped converting from gas to electric in 1980, The EV1 electric automobile production was stopped, the steel industry has been limited, the freight trains criss-crossing the United States still burn 17% of our oil, the DOE has stopped promoting Geo Thermal home heating systems. All of these savings in energy were stopped because we do not have the electrical generating capacity.

The new Energy Bill passed by Congress has provisions for the US Government to guarantee the bonds for (5) new nuclear power plants. Plans have been announced to build one of these nuclear plants at the Savannah River Project. The output from this new nuclear power plant should be directed to the production of hydrogen. THIS IS THE ONLY WAY TO PRODUCE HYDROGEN.

Therefore, I urge you to write a column on producing hydrogen using nuclear power right here is South Carolina.

-- Alexander D. Kline, P.E., Bluffton, SC

Recent feedback:


scorecard

Here's a "thumbs up" and "thumbs down" related to various political news items from the past week:

Thumbs up

Richardson. Sen. Scott Richardson, R-Beaufort, was holding court on Thursday to try, unsuccessfully, to talk other senators into putting surplus monies into three categories: rainy day debts, school buses and secondary roads. He was told that his request should instead go through committees, first. That means, he said, that the committee or committees would make the decision mostly out of sight of the public. Instead, he argued, there is nothing more public than the floor of the Senate for decision-making. No FOIA needed. Right he was.

Smith. Rep. James Smith, D-Columbia, appeared to lead the opponents of the House's greased slide to approval of property tax reform legislation. Smith several times presented amendments, all of which failed in the Republic onslaught, but at least twice, Smith's constitutional arguments sent the dais luminaries to out-of-earshot conferences. While both instances resulted in rulings against Smith, he had the GOP leadership worried despite the overwhelming Republican majority.

In the middle

Caught. Many's the time that a legislator feels that he or she is caught in the middle, facing a no-win vote in which the legislator can be criticized either way. Last week's complaint came from Rep. Michael Anthony, D-Union, who said he more than likely will vote for an open enrollment bill, but that home rule concerns worried him: ``I'm just so tired of us legislating everything from Columbia.''

Thumbs down

Pay gaps. The Human Affairs Commission's recent report on gaps between blacks and whites and between men and women in state government is once again abysmal. The Alliance for Women argues that not only is the "pay gap between women and men significant ($8,055 in 2005 down from $8,083 in 2004), the number of women in policy level leadership decreased (17 women agency heads in 2005 down from 19 women in 2002. This trend in pay is actually a national trend.'' One of these days, the bureaucrats, policy makers and politicians will realize there are more women than men living in South Carolina and, thus, more women to outvote men.


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