Thursday's editorial praises the recent property-tax swaps by the Horry County school board, but also praises one board member for arguing the reductions may not have not gone far enough.
Last week - fending off its own declining tax revenues and dire news from the state - the Horry County school board narrowly voted to shift a number of local funding sources that will have the net results of, first, keeping part of a promise made during last year's school sales-tax pitch and, second, lowering the school's property-tax rates on owner-occupied homes by about 29 percent.
On the surface, the maneuver sounds like and is a good deal for taxpayers. But school board member Joe DeFeo, leading the opposing faction in the 5-4 vote on the budget, doesn't want you to call it a tax decrease.
Well, OK, Joe - a tax decrease it isn't. But it's not exactly a tax increase, either. And the process has so many moving parts that it is tempting to call it, as DeFeo does, a shell game. But we don't believe it's that, either.
The backdrop to the now-raucous drama is the campaign for the 1 percent sales tax for school construction, in which voters were assured that if the sales tax passed, that property taxes would decrease by 18 mills by 2011. In the first year, as the sales-tax money just started rolling in, the tax dip would be slight, but brought to the full reduction in the second year, they promised.
Here - though it's water under the bridge - DeFeo correctly points out that the deal only benefits property owners. Those who rent their homes must still pay the sales tax, but get no property-tax credit.
"On poor people, this is nothing but an absolute, flat-out tax raise," DeFeo said.
Flash forward to the present. Now in the process of planning the budget for the first of those two years, Horry school officials proposed lowering property taxes by an initial 4 mills, keeping their pledge to sales-tax voters. Fair enough.
It is a second, lateral move that complicates the issue. Because of cuts in state funding, officials proposed transferring another 4 mills' worth of property-tax dollars away from school construction over to operations, a move schools' Chief Financial Officer Jeff Riddle likens to putting off a home renovation when the bills get tight. Again, sound thinking.
Because of the way schools are funded, however, that move will further reduce taxes on owner-occupied homes by 4 mills for a total of an 8-mill decrease on them, but not on all other types of property - commercial, so-called "real property" such as cars, and so forth. And this is where DeFeo worries the deception will creep in.
Next year, when it comes time to fulfill the rest of the promise to sales tax voters, what will the board do? DeFeo thinks they will tell homeowners that because their property taxes went down 8 mills, the board only owes the public an additional 10-mill reduction - though all other property owners only saw a 4-mill decrease.
"It's like, 'Watch one hand so you won't see what the other one is doing.' ... It is no wonder people do not trust politicians," DeFeo said, but this is where The Sun News may part ways with him, for now. The budget adopted by the school board last week appears to do its best in a catastrophic year for S.C. school governments - stimulus money, anyone? - by taking advantage of a lull in local population growth to shore up falling funds for teachers. So we will give the five board members who voted in favor of the plan the benefit of the doubt that they will uphold the full extent of their promise - to all taxpayers - next year.
"When it comes up next year, you are going to hear me reminding you of this moment," DeFeo said.
Joe, we certainly hope so.
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