The hot-button issue of property tax was pushed again Wednesday as the South Carolina Senate began looking for new ways to address some of the complaints about the Legislature's previous changes to the tax system.
A previous compromise plan aimed at improving property taxation fell apart on Jan. 19, the same day it was introduced; the issue was returned to the Senate floor to be resolved through debate and floor amendments.
The starting point for the debate is a plan the Senate Finance Committee recommended last year that would cap reassessments at 15 percent when properties are sold.
The question of how to fairly value properties for tax purposes sits at the heart of the issue.
Properties currently are reassessed at full market value when the ownership changes, and those point-of-sale reassessments have resulted in large tax increases for most people who purchased property in South Carolina after 2006.
That year, the Legislature created a new system of property taxation that put tight caps on assessment increases for properties that don't change ownership, while creating the point-of-sale system for properties that are sold.
The goal was to protect long-time homeowners from large tax increases, while taxing others based on what their property is truly worth.
Real estate brokers said the tax increases driven by point-of-sale reassessments are scaring away buyers and hurting the state's economy; many lawmakers agree.
Associations representing counties, municipalities and school districts have opposed large reductions in point-of-sale reassessments, because it would reduce their revenues at a time when the state is cutting back their funding and budgets are particularly tight.
The two sides appeared to have reached a compromise in January that would have temporarily eliminated point-of-sale reassessments on commercial properties, and permanently reduced future commercial point-of-sale reassessments.
The S.C. Association of Realtor withdrew its support, however.
Sen. Thomas Alexander, a Walhalla Republican leading the negotiations, was unable to establish a new compromise in the days that followed, so on Wednesday he revived last year's Senate Finance Committee plan on the Senate floor.
That plan would, among other things, put a 15-percent cap on point-of-sale reassessments, but only until the end of 2014.
"We're kind of back to square one," said Scott Price, general counsel for the South Carolina School Boards Association.
The local government and school associations opposed the committee recommendation, which the state estimates would reduce property tax revenues by $44 million. The Realtors association has supported the plan.
Alexander said the Senate Finance Committee plan should be seen as a starting point for more negotiation.
"Obviously, it can be amended," he said. "I think there is a genuine desire that a compromise be reached."
None of the plans brought forward this year would address properties that already have been reassessed due to sales. Instead, the competing proposals all are aimed at reducing future point-of-sale reassessments, with the goal of increasing real estate sales and investment.
"It is very complicated, and it has tremendous impact," Alexander said.
Nick Kremydas, S.C. Association of Realtors chief executive officer, said the group's board would have to review the plan, but he said the idea of putting caps in place for five years is appealing.
"It's part of the way to force the state to look at the tax system," he said.