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Editorial: SC trying to one-up those ridiculous SCE&G checks with tax rebate checks

Mega Millions (copy)

The SC Legislature voted to send $50 income tax rebates to many taxpayers after the SC lottery finally managed to find the winner of the $1.537 billion Mega Millions jackpot, who had $61 million in state income taxes withheld. File/Staff

The Legislature does so many ridiculous things that we can’t keep track of them all. On Monday, the S.C. Revenue Department reminded us of one, when it announced that it would send out those gimmicky $50 tax rebate checks just in time for Christmas shopping.

And you thought you were insulted when you got those Dominion Energy refund checks last month? At least that was money that had to be returned to ratepayers — although it could have been delivered far more efficiently, and with less inconvenience to recipients, as a credit on our monthly power bills.

This is money the Legislature did not have to send us. Did not need to send us. Could have found a better use for.

We’re not saying that $50 is meaningless — although it will mean a lot less to the estimated 1 million taxpayers who receive the checks than the million or so South Carolinians who file tax returns but won’t receive rebates because they didn’t make enough money to pay at least $50 in state income taxes last year.

And at least the state checks are larger than what most former SCE&G customers received from that enrich-the-plaintiffs-lawyers’ settlement with successor Dominion Energy; the state won’t be putting stamps on envelopes with 12-cent checks inside. It will, however, be spending $700,000 to mail the checks because the Legislature, egged on by Gov. Henry McMaster and taking a cue from the lawyers, decided to distribute the rebates through an inefficient system that’s more about making sure everybody realizes they’re getting the money and knows who they need to thank rather than an efficient one. As the Revenue Department points out in its FAQ, taxpayers do not have the option of having the money deposited directly into their bank accounts, like tax refunds, or having it applied directly to tax debts.

Legislators didn’t approve the refunds because S.C. taxes are ridiculously high. Our state consistently ranks among the 10 lowest-taxed states in the nation.

Nor did they approve the refunds because they had met all their obligations and couldn’t think of anything better to do with the $61 million income-tax payment the state received from a S.C. resident who cashed in a Mega Millions lottery ticket for $861 million. We certainly could use the money to pay for new school buses, or textbooks, or to help cover maintenance and upgrades in school districts that can’t afford them. (We couldn’t use the money to hire more teachers or pay teachers more, because those are ongoing needs and this is a one-time windfall.)

Speaking of school needs: The state never would have received the extra $61 million if not for the lottery, whose proceeds by law and under the state constitution must be spent on education.

While state law didn’t require the resulting income tax payment to be spent on education, we would argue that the spirit of the law did. And given how many times the Legislature has ignored its legal requirements to fund education, it would have been a nice gesture to use this little windfall on education when it didn’t have to.

As legislators consider how to spend $350 million in surplus from the 2018 budget, we hope they won’t squander it too, but instead will use it to address the problems that keep our state from being the best it can be.

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