State lawmakers are finally waking up to the knowledge that the notorious property tax reform law known as Act 388 was ill-conceived and damaging. Unfortunately, it has taken more than eight years, and a worst-case scenario, to bring lawmakers to this much-needed realization.
It should not take that long for legislators to assess the damage and find a way to fix the problem they created. Just as importantly, they should heed the lessons of Act 388 and avoid making the same mistake twice. They should reject Gov. Nikki Haley’s version of the tax swap that would exchange an increase in the gasoline tax for a significant reduction in the state’s income tax.
In a revealing story last Sunday, Greenville News Columbia Bureau reporter Tim Smith reported that the 1-cent sales tax hike in Act 388 never raised the amount of money it needed to in order to offset the reduction in property taxes on owner-occupied homes. Since it was enacted, Act 388 has left an $866 million school-funding shortfall that has been patched largely with money from the General Fund — money that could have gone to fund road improvements, health care or other education needs, particularly in cash-strapped rural school districts.
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South Carolina Association of Taxpayers 