COLUMBIA — Local government officials sounded a warning to the Legislature on Wednesday that property taxes could be increased across South Carolina and fire and police services might be on the chopping block if the state's proposed $5.6 billion budget does not get a rewrite.
More than 100 officials gathered here to protest the spending plan, which must be approved by the full House before it is sent to the Senate for consideration. The first draft of the budget includes a 42 percent cut in funding allocated to counties and municipalities.
"The proposed $122 million cut in the local government fund will have a very real impact, both in the form of higher property taxes and cuts in basic services," said Greg Pearce, president of the South Carolina Association of Counties. "Fewer police on the road, dangerously overcrowded jails, slower response times for medical emergencies and fire service and fewer opportunities for our young people are just a few of the service cuts that should be expected across the state."
The tanking economy has drained state coffers by more than $1 billion in this year's budget, and the financial situation is not expected to improve before the new budget starts July 1.
House budget writers drafted the spending plan with the intention of using about $1 billion in federal stimulus money to offset loses, mostly in education and health care. Counties and municipalities receive annual funding from the state Legislature to offset revenue lost because of decisions made in Columbia.
One such decision hamstrings local governments by limiting annual property taxes to inflation and population increases.
Rep. Anne Peterson Hutto, D-James Island, and Sen. Vincent Sheheen, D-Camden, were among a group of Democratic legislators who stood in solidarity against the budget. Passing the state's budget problems on to local governments is not the way to fix the problem, they argued.
"If the state does this, effectively the state is raising property taxes because that's the inevitable result of a cut to local governments funds," Sheheen said. "Instead of raising people's property taxes we ought to be looking at other alternatives, which includes further cuts to state government in targeted areas and it includes having a cigarette tax increase on the table."
Rep. Jim Merrill, a Daniel Island Republican and a member of the Ways and Means Committee that prepared the budget, said he expects significant changes to the proposal when it hits the House floor, including the possibility of using a cigarette tax increase to offset losses in revenue.
"Everyone is scrambling to try to find a plan that will work," Merrill said. Options on the table include rejecting the stimulus money and dishing out further budget cuts. Also under consideration is shifting more funds to local governments so a cut there is more in line to the cuts issued to other parts of state government and closing some state agencies and consolidating services, Merrill said.
Rep. Wendell Gilliard, D-Charleston, said the value of a government is measured by the way it treats its children and senior citizens, and the proposed cuts to local government do not treat residents right.
"Sometimes you can cut until you start cutting people's pride and dignity," Gilliard said. "Unfortunately up here, it takes money to run government. We created the problem. This is where the solution should come from and not be put on the backs of county government. Enough is enough is enough."