DCTA Articles on South Carolina State Taxes

  

Millage Rates and Tax Relief 2006-2007

"Property Tax Relief" for Some is More Right Than You Know

A Tax is a Tax is a Tax

The Flim Flam Sales Tax Scam

Taxes Will Destroy the Good Life

Tax Tax Tax Spend Spend Spend

 

 
 
 
 
By
 
John Braund, Chairman, & Joe Kress, Corresponding Secretary
Dorchester County Taxpayers Association
 
August 1, 2006
 
The July, 2006 South Carolina Policy Council’s Insider report contains a most interesting revelation that should grab the attention of those who are concerned about taxes.
 
“Earlier this year when Sen. Hugh Leatherman (R-Florence) and Rep. Bill Cotty (R-Richland) hammered out the details of the 2006 Property Tax Relief Act on the back of a fried chicken box, few policy makers anticipated that local governments and school districts would completely ignore the new law by frantically working to increase millage rates.” Sen. Leatherman, Rep. Cotty and their colleagues must think angels hold local office, and that their own cherubic innocence in passing tax relief will be vindicated.
 
Circumventing the intent of the new law is exactly what is happening here in Dorchester County. Our District #2 school board decided that they would need another $5.5 million or so dollars above their minimum budget. Fortunately, the County Council didn’t fall for this and approved only about a million-and-a-half dollars of the board’s requests. The District’s Superintendent considered that amount a significant victory. Next year, when the school administrators prepare their budget, the baseline will include that million-and-a-half dollar add-on from 2006. In any event, the school board is only hedging its bets.
 
Throughout the state, since the tax relief legislation was signed into law June 12, as noted in the Policy Council’s report, numerous governments and school districts have voted to increase their millage rates in order to pad budgets and raise taxes before the property tax changes come into effect. So this is just another case of “monkey see, monkey do.”
 
As a part of the recently enacted tax “shift,” a millage cap will become effective January 1, 2007. Local governments and school districts want no part of any such restriction. The millage cap will restrict spending from year to year, so local councils and school boards (about a dozen or so thus far) are implementing pre-emptive increases in millage rates, so that higher millage rates will be in effect when the new rate caps become effective.
 
Facing increasing enrollments, most districts are taking the matter seriously. Spartanburg District #6 Superintendent Darryl Owings recently told The Spartanburg Herald-Journal, “I don’t know if (districts) will inflate their budgets, but they’ll be very conscious of the fact that this is the baseline year and autonomy in the future will not be there.”

The question is: Why should policymakers anywhere else have more trust in the feather merchants of the state government than they do in the taxpaying voters of their counties and school districts? Clearly, Dorchester County District #2’s school board neither trusts the policymakers in Columbia nor their taxpayers. They more than proved this in 2003 by circumventing a vote of the people in a referendum on school financing when they later adopted an alternate school funding plan sold to them by InRe Financial. And now, after months of delicate negotiations, when a new state law is finally passed which includes a spending cap, this cynical attitude of our school board is more evident than ever.

However, Sen. Larry Martin (R-Pickens) has promised to ride to the rescue next session by proposing a rollback to 2005 millage rates statewide. How the school districts will fill the gap this creates between current “maintenance of effort” levels of spending, required by state law each year under the Education Finance Act, and the spending levels afforded by the 2005 millage rate is anybody’s guess. (Why didn’t Sen. Martin foresee this when he was sitting on the Senate’s Joint Committee on Tax Reform last summer and fall?)
 
The Policy Council report does list the exceptions provided in the new law, which would allow local governments to exceed the millage cap under the following circumstances:
 
·         The local government runs a deficit,
·         A natural disaster or terrorist event occurs,
·         The local government has to comply with a court order,
·         A business closure decreases revenue by ten percent, or
·         The local government has to comply with an unfunded state or federal mandate.
 
If anyone believes that the local governments and school boards are unaware of the above protective measures, there’s a bridge for sale in Brooklyn. (Deficit spending, anyone?)
 
It should also come as no surprise that these government entities would engage in further fiscal irresponsibility since the new tax law also includes a provision to abolish the tax shift altogether if both bodies in the Legislature vote to do so by a two-thirds majority. In light of potential lawsuits brought under the Fourteenth Amendment’s equal protection clause and our own state’s constitutional requirement to provide a “minimally adequate” education for all its children, the Legislature would be hard-pressed to do otherwise.
 
Indeed, the recent “red flag” raised by Moody’s Investors Service relative to our school financing situation (as reported in The Post & Courier of August 1, 2006) resulted from a “new law” – the tax shift – that “will hurt districts’ financial flexibility.” In light of this revelation, we should not expect the South Carolina Supreme Court to hesitate to enforce the funding strictures laid down by the constitution and order the new law rescinded.
 
Now all those millionaire proponents of higher state sales taxes to provide a tax break for their McMansions must surely be upset at school boards who circumvent their well-laid plans by means of huge millage rate increases. But the ones who should really be upset are renters, small business owners, and ordinary folks who pay lots of sales tax on stuff.
 
So how much deeper into the black hole of fiscal irresponsibility could we go? Well, just vote for the 15% reassessment cap on the upcoming November ballot. The tax-shifting elitists will be greatly pleased, and only our children’s children will have to suffer for it.
 

 “Property tax relief for some” is more right than you know

 

Regarding the "Property tax relief for some" article, John O'Conner did a good job of describing the impact of the tax swap element of Act 388. However, he seriously downplays and misinforms concerning the most controversial of the three elements of the new law – the 15% reassessment cap – which he paints with the tax swap brush. None of the data attributed to Clemson University reasearcher Ellen Saltzman applies to the impact of the 15% reassessment cap.

 
While the 15% reassessment cap is one of three elements of the new law, it is not an element of the tax swap itself and will be applied to all properties – not just to homes. It is the cap-stone of the new law for wealthy real property owners, guaranteeing they will never have to pay taxes on FMV for as long as they do not sell their property.
 
According to South Carolina Chief Economist William C. Gillespie, the cap shifts a tax burden of $372 million from higher-value properties with assessment ratios of 4% and 6%, including homes, second homes, apartments, motels and all other commercial properties that appreciate above average, to all lower-value property owners over the next five-year reassessment period. $244 million of that total will be shifted to properties within the categories being assessed, including new buyers of real property, owners of properties that do not appreciate above 15%, and owners whose property declines in value. The $128 million which remains will be shifted to agricultural properties, personal property such as motor vehicles, mobile homes and boats, manufacturers, utilities, and others.
 
The cap will shift the burden of property taxes onto lower-income families, tax similar properties differently, and discourage the sale of real estate, according to the findings of other states that have reassessment caps, such as Texas and Florida.
 
Our 15% reassessment cap required us to vote on a constitutional amendment because it is an exception to the requirement that taxation be equal and uniform and that all property be taxed in proportion to its FMV.
 
Because voters were not properly informed last November, we now have a constitution that OKs a gross "inequity" in the assessment of taxes, whereby low- and middle-income property owners subsidize wealthy property owners. Why? Because the 15% reassessment cap cannot be applied "equally," according to Clemson reasearcher Ellen Saltzman in her 2004 report on the impact of a similar 15% cap in Beaufort County.
 
I opine that a “correction" is in order.  
 
Bob Henderson
 
 

 
A Tax is a Tax is a Tax:
Let's Attack the Beneficiaries

A SALES TAX TO REPLACE PROPERTY TAXES STINKS!

 

First of all the State would have a hand in establishing the overall sales tax percentage, otherwise those in higher taxed counties would lose business to lower taxed counties. Shoppers look for bargains and will go to another county to save on taxes. The gas tax is uniformly applied statewide now and the state controls other areas subject to sales taxes. The five cents on the dollar food tax is an example.

Given that the state would control the overall sales taxes what about the local option sales tax that counties impose on themselves? Will the state control or impose an additional sales tax to cover local sales tax options?

Will these taxes be diverted to support the cost of lottery operations, since the Governor was elected with gambling interest-money? We can bet that down the road the lottery will be a losing proposition as it is in just about every state that hasn’t established strict guidelines as to where the money is to be spent. Already, the bottom feeders in the S.C. legislative body are scrapping on whose interests receive a part of the action.

The increase in the gas tax could climb as fast as the department of transportation can grab the extra largess. It will be a cold day in hell when the increase in revenue from the gas tax will offset property taxes.

Property taxes are the major source of funds for counties and cities. To give up control of revenue derived from property taxes in exchange for a handout from the state’s sales tax on gasoline or from other additional sales taxes is hoping that pigs will fly and manna will again fall from heaven.

What’s to stop the legislature from imposing sales taxes without any say from the local taxpayers?

The gross incompetence in managing the budget to a point that the State went from several hundred millions in surplus to an enormous debt that could result in much lower bond ratings is an example of Shylocks in charge of the baby’s bank account. Don’t expect prudent trimming from these birds.

The first thing they use as an excuse to convince the public that more taxes are needed is to cut back on security, safety and health. That is the modus operandi of Willie Hutton who beamed into where the money is, except in this case it’s not the banks but the taxpayers’ pockets.

Already, in Lexington County the politicos are salivating over themselves since the “We the People” taxpayer group brought up this sales tax proposition to the County Council. My bet is that the core instigators were neo-Republican developers, realtors, land speculators and contractors.

With proper seeding, using greenbacks in the right places, chance are the general public will buy into what can only be described as the abandonment of local control in favor of complete state control for raising revenues.

Putting a cap on sales taxes at a certain level will last as long as some shyster figures out that he can sue the state in order to lift the caps or a pompous state or federal legislator wants to build a statue to himself using money out of additional sales tax revenues. Don’t expect all that additional loot to be returned to the local levels of government to offset property taxes.

Are the County councils looking for a way to get out of responsibility? It is now quite common for school boards to control their own budget and raise taxes (i.e., fox in the hen house authority).

County councils seem to be more than willing to give up responsibility for approving what is the largest portion of county budgets - schools. Are county councils willing to give up to the state control of taxing authority on the remainder of their budgets? They better think twice and so should those school boards with their taxing authority. Once the state grabs the control of sales tax revenues, what can these school boards expect other than to forfeit their right to raise money since the state will eventually be the only allocating and dispensing authority for all funds.

The real tragedy emerging from this stupid idea of exchanging sales taxes for property taxes is what happens to all those non-property owners who rent and receive no benefit. Again, pigs will fly before the majority of landlords will reduce their rent as the result of this enormous, perpetual windfall.

Yet, the increased sales taxes will be attached to every item the public purchases; every morsel of food it eats; every stitch of clothing, every mile driven and when most taxpayers buy that second-hand car that they can’t afford, they will know how Europeans have endured unfair taxation to satisfy the interests of the landed class.

Will those who own no property, but are on fixed incomes be better off? How about those young heads of families, who are carrying large mortgages, will they be able to deduct sales taxes?

Growing families spend much more than those who have already raised their offspring and paid off college tuitions. Will sales taxes cost more than eliminating property taxes do for these middle-class wage earners?

Europeans went along with the bureaucrats in allowing the state to impose not only a simple sales tax on everything, but they also bought into the idea of a value added tax which sets a tax on every item in the process of making the completed product. The result of this kind of taxation was that no individual could identify just how much or how many taxes were charged for any product.

That’s why cars, refrigerators, stoves, washing machines and the houses they live in and the land area on which they stand are half size. And guess what? Landowners in Europe pay higher property taxes than any one can imagine.

Over taxation turned most of Europe’s governments into socialist welfare states. The dynamics of American productivity can never be matched so long as the European can’t have a say in how much they are willing to be taxed by the government.

Now, the 12 member countries of the European Union are willing to give up the control of their money system and turn it over to an elite central banking cartel which inevitably will overwhelm each country’s sovereignty. The process is well on its way in the U.S.; all it takes is to follow Europe’s tax policies.

Don’t ever believe that once sales taxes are imposed that property taxes will not creep back into the equation. That simply is not the way of the political ethos. So long as politicians are rewarded for delivering the bacon to their constituents (and to themselves) they will always pay for it with other peoples money.

Joe Kress, Corresponding Secretary


THE FLIM FLAM SALES TAX SCAM

Joseph H. Kress

 Is the title of this essay too strong not to cause an immediate turn-off by those who propose that taxpayers cough up an additional 40% sales tax increase (2 cents on the dollar) on everything they buy except prescription drugs? Probably it will upset them, but the Dorchester County Taxpayers Association intends to lay out the reasons why this add-on sales tax is a bad, bad idea that needs to be defeated.

Politicians depend on voter apathy and short memories when they slip through a simplistic solution for a very complicated problem. So let’s review what is being attempted and why it won’t solve anything except increase property taxes and add on this increase of two cents on every dollar spent for life’s necessities at a time when there is an inflation explosion on the horizon and while unemployment in South Carolina is higher then it has been in years.

  • Sales tax, unlike property tax, cannot be deducted from state and federal income tax. The loss of deductions for property taxes that apply to school support (which amounts to 74% of the Dorchester County tax bill) is in effect a tax increase, all other factors being equal.
  • South Carolina’s sales tax is already 40% of total of state tax collections and is above the national average without considering the 40% planned increase.
  • There is no guarantee that sales tax receipts will be adequate where generous county allocations for schools are provided in hopes of better schools.

Currently the State Constitution provides local government the authority to impose property tax. Under the new proposal, counties and cities are prohibited from assessing a property tax increase relative to school taxes, unless the distribution of the state sales tax is insufficient to cover operational costs within any school district. This is an example of political double talk.

Funds would be distributed monthly based solely on the Weighted Pupil Unit (WPU) with all districts receiving the same funding per WPU. Say that an affluent school district finds that its sales tax allocation from the state treasury is insufficient to meet the already established high education standards. There is no doubt that the school district would demand new property taxes to cover the difference. Also, there is no prohibition against local governments raising taxes on small businesses and other items subject to property tax.

Currently, the State returns to local governments $410 million per year for the homestead exemption and property tax relief taxpayer organizations worked so hard over a period of three years to secure. This relief will be sacrificed for the temporary elimination of the property tax for schools, but is it a fair trade off?

The two-cent increase ($1.1 billion), pens the current homestead exemption and property tax relief ($410 million) equals $1.5 billion; $400 million more than needed. This is clearly a tax increase! Reports indicate $40 million will go to other government programs. This last tidbit calls to mind the usual question about how the legislature and the government officials act when they add on extra taxes.

The first three pennies of the five-cent sales tax were approved for support of school construction, with only the fifth penny of the five-cent sales tax actually dedicated entirely towards supporting the schools. Much of the first three cents levied never reached the school districts, but landed in the general fund to be spent for other purposes.

Sales tax, as indicated earlier in this essay, is a shockingly regressive tax for seniors and single-parent households. Senior citizens, those on limited incomes, and those who lost jobs are seeing their purchasing power dwindle. Seniors move to smaller homes as an economy measure. The picture continues to darken as each penny of sales tax increases the burden that the old property tax demanded. Social Security income is exhausted on living expenses and the increased sales tax would only limit an already limited purchasing power for those who depend on SS as a major source of income.

A recent letter to the Times Examiner by Mr. R. Edward Allen of Fountain Inn, S.C. illustrates the plight of the retired on limited fixed income.

“A senior couple retired after a half century of work and contributing into the Social Security system. They sell their family home to downsize to a retirement home. The mobile home they buy is modest, but comfortable. They buy a used vehicle 10 years old for transportation. New cars are too high to consider. The current tax on the retirement home is less than $300, way below that of their former home. Their combined Social Security income is less than $1,650 per month, which has the usual 5% or more sales tax on expenditures…even for over-the-counter drugs and food purchases.

“Gasoline tax is to be increased by 2 cents per gallon,[1] license fees and even a tax on labor for repairs is being considered by the tax gurus. Now, if the couple has a net income from investment or savings enough to raise their annual income to $20,000 and sixty percent of that income ($12,000) is spent for necessities which are taxed at an increase rate of 2% on the dollar, the couple pays $240 more in sales tax than they did before the sales tax increase.”

The couple pays a total of $248.68 toward school operation expenses less $62.17 (25%) for the S.C. property tax relief or a net $186.51 property tax for school operating costs. But wait a minute! What if one of the couple is over 65 years old and entitled to the homestead exemption? That amounts to $22.00 which reduces their total property net tax bill to $164.51. Under the propose plan the couple will lose $75.49 by voting for the 40 % ($240.00) increase in sales taxes.

Based on the track record of the legislature and other government officials, there is no assurance that the sales tax which is being proposed will actually reach the classrooms. However, all parties to this scam will be able to trumpet what they’ve done to increase the state’s contribution to the welfare of its poorer schools. Not that this is fair, but no matter, the local school boards can just reinstate the property tax!

Local governments have increased sales taxes to as much as 7%. Add another 2 cents and the total in some localities reaches a whopping 9% of every dollar spent. Local economies, such as in Charleston, are largely service oriented, consisting of waiters, bus boys and store clerks whose salaries are far below that of other industries. They can hardly afford the high rent much less the increased sales tax. However, this proposal will also increase the sales tax cap on cars to $1,000.

Speaking of high rent, what about those millionaires who, may or may not be permanent residents of the sate, and will no longer pay a modest percentage of their income for property taxes on their mansions? Yet, the average homeowner must forfeit his homestead exemption and property tax rebate for what actually may be a tax increase and pay up to a $1,000 in taxes on the purchase of a new car. Who benefits most by this legislation?

They say the increase in sales tax would pay South Carolina teachers the national average teacher salary. However, the Hoover Institution finds teachers earn more per hour than architects, engineers, scientists and nurses. According to economist Richard Vedder, who authored the recent Hoover study, teachers unions fail to account for shorter teaching workday and work year when measuring compensation. Teachers come out ahead when spring and summer breaks are factored in. Vedder also notes teacher’s retirement and health-insurance benefits are typically more generous than those of the average professional.

Take health care. Labor Department data suggest about half of teachers pay nothing for single coverage; their employer picks up the entire premium, he says, In contrast, just one-fourth of private “professional and technical” workers pay nothing.

“If direct hourly compensation averages 5 to 8 percent more for teachers than for all professional workers, and fringe benefits are perhaps five percent more,” Vedder concluded, “all told, teachers’ average hourly compensation plus benefits exceed the average for all professional workers by roughly 10 to 15 %.

Moreover, he points out, teachers have greater job security, rarely suffering layoffs or firings, which allows them to earn more over time.

American Federation of Teachers President Sandra Feldman, however, insists teachers’ salaries, at an average $43,670 nationally, are relatively low among professions. The national average for beginning teachers in 2001-2002 school years was $30,719.

While pay for beginning teachers rose from the last survey, salaries for “experienced teachers” are not showing much improvement,” she said. [That does not apply in S.C. because there is the TERI Program (The Teacher and Employee Retention Incentive), which allows teachers (and state employees) to officially retire at 28 years but keep their jobs and their full salaries for another five years, stop paying into the retirement system, and collect (although not until they truly retire) all of the pension payments that would be owed them as of their original retirement date. By allowing the senior teachers in the highest pay scale to continue past normal retirement blocks those of equal qualifications and lower pay scales to fill the slots that the “un-retired” teachers occupy. Besides that, those teachers not hired as replacements for those who are benefiting from the TERI program would not contribute to the retirement fund.

The taxpayers pick up the tab for this added expense that results from any imbalance for not only the teachers’ but all state employee retirement funds.[2]

The cost of living in South Carolina is not the same as Chicago, New York and the East Coast or the “Left” Coast or for that matter, living costs in the Southern States with certain exceptions such as Atlanta are lower than the rest of the entire country, mainly because overall wages are lower. The question then what is the justification for raising teachers’ salaries to meet the national standard which doesn’t apply to the South Carolina average taxpayer who must shoulder the increased load?

Before any effort is made to increase the sales tax, it behooves the Governor to initiate an audit of the Department of Education. A recent S.C. Policy Council analysis showed that only 48.6% of education dollars were making it into the classroom. At last, policy makers began to openly question how the education bureaucracy was spending tax dollars.

In the heated atmosphere created by the S.C. Policy Council’s report, Speaker Wilkins and numerous legislators called for an immediate audit of the State Department of Education and local school districts, to be conducted by the independent Legislative Audit Council. If conducted, the audit would look at K-12 spending and specifically analyze departmental salaries of over $50,000 per year. The Policy Council pointed out that 231 employees in the S.C. education department make more than $50,000 a year, substantially more than the average teacher is paid.

But here is the clincher that should turn off any voter…

There is a legislative intent to increase the School Operating Expense Fund annually based on the CPI. This could mean that the sales tax could be raised to maintain the fund. Therefore, when the coming inflation takes hold, expect another penny or so sales tax increase. This is the easy way for the bureaucracy to lay on the taxes at the expense of the counties who now have no control over how the money is to be spent. At least the voters in the counties could put pressure on local school districts regarding expenditures since property taxes were a factor. All the state has to do is increase the amount per weighted pupil unit and presto the money will materialize ala an increase of a penny.

Oh! The wonder of it all.

*********

[1] This comment in the quotation is, as far as can be determined, not part of the proposed sales tax increase.

[2] It must be noted that the state legislature allows all state employees who qualify the same privilege as extended to the teachers, since no group of state employees can be discriminated. This was not supposed to happen. The intent of the TERI Program was to retain teachers, not other State employees. The SC Legislature, purposely or not, costs S.C. taxpayers an enormous amount of money in unnecessary wages.

*********

 

TAXES WILL DESTROY THE GOOD LIFE

January 17, 2004

Representative Quinn, in his pitch for his bill to increase the sales tax by 40%, overlooks past history and the fact that the first 3% of the present S.C. 5% sales tax was originally meant to be dedicated for schools. That didn’t happen…nearly all of it was spent for other purposes.

The property tax rebate was passed when the legislature was on a spending binge, only a few years ago. Under Representative Quinn’s proposed bill, that reduction will be eliminated in exchange for eliminating taxes applicable to school operations, but not those taxes needed for funding school maintenance and construction. Taxpayer organizations fought long and hard to reduce property taxes, but the sales tax bills under consideration will ultimately benefit large land owners, developers and those in the business of renting out Section 8 housing. This bill to eliminate the school operational portion of the tax has only minimal benefit, if any, for the individual owner of a house valued below $250,000.

Will the proposed sales tax benefit those who rent? Will any of the savings realized by the landlords’ windfall be passed on to those who can’t afford a home and must pay rent? The bill is generous to those who are in the business of renting. The chances that the lower school tax will be passed down to those who pay rent is wishful thinking.

The sales tax is really a tax increase. The trading off of benefits is not balanced. Only the state’s general fund will benefit and again it will be open season for the porkers.

One major flaw within both of the proposed tax bills that are being offered to the voters is the caveat that if the state’s distribution of the proceeds from the increased taxes is insufficient to cover the operational cost of individual school districts, the school boards may use the referendum method to make up the difference in what the state pays and what is needed to meet school operational requirements. What school board ever had enough money to fill their ever-expanding desires?

The sales tax increase now under consideration, completely overlooks what is now happening within three school districts within South Carolina and if allowed to continue, will spread throughout the state. Greenville, Dorchester and Berkeley County school boards have determined that they can skirt future bond referendums for new school construction. This alternate funding plan completely bypasses the voters - so that whatever the boards want they can have in the way of the number and amount of money to build schools and the voters won’t have a thing to say on the matter.

The plan also allows school boards to turnover all existing bonded debt incurred within the eight percent limit of property values within a school district that can be borrowed for new school construction. This funding is specifically exempt from requiring a bond referendum for public approval or disapproval. By rollovering the 8% bonded debt to a non-profit corporation that is responsible for selecting a bond company to market the bonds and collect commissions, wipes clean the limitation on this debt. The school boards are then free to borrow again, without voter approval, up to the maximum of 8% value of all property within the boundaries of the school district. This is a formula for financial disaster.

The non-profit corporation owns the new schools and will allow the school administration to buy back over an extend period, using a lease purchase arrangement which according to existing intent of the law is meant to prohibit abuse of the taxpayers. But InReFinancial Corporation, the engine that has driven this scheme, found somehow, a loophole in the law.

The plan is that a portion of the rent will be applied to the principal and eventually the school districts will purchase incrementally all the schools within a period of 20 to 30 years. The corporation will never be disbanded, but will remain as the major means to skirt around the taxpayers forever.

The plan depends on the assumption that property assessments will skyrocket at a rate ranging from 2% to 3½% a year. Of course, if we have super inflation or the opposite, deflation of the dollar, which is already happening, the entire plan is in jeopardy. Dollar deflation raises the cost of living when all imported goods cost more. Inflation causes interest rates to rise and employment to fall and new school interest rates to rise. People will find that they can’t afford to hold on to their homes. Taxpayers will be asked to pay for any default that the insurance companies who cover bonds refuse to anti-up. Think of it, those who are asked to meet the demands of the tax collector had nothing to do with this flimflam, since they were denied a referendum vote on the matter. This is truly taxation by out-of-control school board representatives that really don’t represent the taxpayers. Thus, it is taxation without representation.

Now add on the 40% increase in sales tax proposal that eliminates the property tax rebate that was passed by the legislature three years ago; add sales taxes to every morsel of food, every over-the-counter drug; every piece of clothing, every stick of furniture, appliances, every vehicle, up to $1000, as one of the pending bills propose, instead of the present $300 dollar maximum sales tax on new car purchases; and then add the recent tax on dry cleaning services (What will be the next target relative to taxing services?) and then add all those local county and city taxes to what we now pay and add on the proposed Charleston County one-half percent sales tax increase to support CARTA as an example of local initiatives and other dreamed-up requirements. By the end of this year, New York, Pennsylvania and New Jersey taxes will be a welcome exchange instead of what we’re about to pay.

Illegal Immigrants and Schools

There is an important factor. South Carolina has lost a large number of its higher paying jobs. The overall pay scales within the state are much lower than those outside its borders. Tourism is a major source of employment and service jobs do not warrant high wages. If the economy goes into the dumpster, the majority of the state’s work force goes on welfare. The influx of illegal workers who will work for wages that are unacceptable, even for those legal Americans who have health and retirement benefits and yet work for minimum wage is affecting the overall quality of life and their employment opportunities. All over the state, in the building trades, and in the food business illegal workers are filling jobs once filled by Americans. This is true in other areas as well such as road construction and the lawn maintenance businesses. The result is a gradual deterioration in the traditional quality of Americans’ standard of living and affordability to live in decent housing and pay the taxes required for schools to house the children of the illegal immigrants.

Alternate Solutions

The National Teachers Association, the SC Department of Education and the district school trustees have up to now fought the idea of using charter schools. Only 20 charter schools have been approved by school boards in the entire state.

If the state legislature and the governor would realize that replacing public schools with charter schools avoids the bureaucratic nightmare now in the making within the public school system. Changing the outdated, bureaucratic regulations related to school constriction where it is stipulated the type materials and design, saves taxpayers hundreds of millions of dollars.

School construction, using modular or steel buildings, the type construction used by Pinewood Prep and other private and religious education institutions at a fraction of the cost of public schools are built in half the time. Because of bureaucratic interference and special architectural designs additional millions of dollars are added to the taxpayers’ bill. The private and religious classrooms have moveable walls to accommodate the amount of needed classroom space required. Extensions to existing buildings are made out of modular concrete factory designed slabs that can be assembled and built almost overnight to meet additional student enrollment.

The Department of Education and the legislature have imposed a rule that applies only to the public schools that requires state-wide testing during the same calendar period of the year. This does not apply to private or religious schools. If this requirement would be eliminated an additional on-third more classroom space would be available through year-round scheduling.

The reason why changes are not made is to satisfy all those on the education feeding line, the contractors, the local suppliers of material and equipment, all who benefit from building Taj Mahal type edifices rather than what would meet the needs of the communities.

The superintendent of Education for Dorchester District 2 once stated that if the proposed Poplar Grove 4,900 acre subdivision is approved where as many as 3,500 + new homes are scheduled to be built, at least $100 million will be required just for new schools and not any other costs to support the infrastructure.

Given the attitude of those who make the decisions on funding… it is apparent to the Dorchester Country Taxpayers Association that a complete overhaul of what is needed to take place regarding how local county councils, the school boards, the governor and the legislature meet their funding obligations; otherwise the state and the counties and cities ( and the taxpayers) will ultimately face bankruptcy.

 

Tax, Tax, Tax, Spend, Spend, Spend

12/20/04

They can’t figure out how to balance the budget without raising taxes, so the S.C. Legislature decided to raid the funds specifically designated for a purpose.

The State Newspaper reports:

  • The $2.00 fee S.C. drivers pay when buying new tires will be spent on things other than cleanups at old tire dumps.
  • The money collected from a surcharge on cell phone bills won’t be used exclusively to help develop emergency technology to locate cell phone users in distress.
  • The Nongame Wildlife and Natural Areas Fund…supported entirely through taxpayers donations by checking off a box on the tax return form. Last year, taxpayers gave $71,000 and the legislators took $9,800 and this year they are about to take $5,000…all to balance the budget in other areas.
  • The 911 surcharge appears on mobile phone bills and supports technology upgrades needed so emergency workers can pinpoint the location of mobile phone users calling 911. Lawmakers want to take $4.3 million for the next budget year. They used $470,000 in this budget year.
  • The Waste Tire Grant Trust Fund is financed through the tire fee and provides grants to counties and cities for collecting or recycling waste tires, which pose an environmental hazard. About $194,000 would go to fund the budget next year. Roughly $541,000 was used in the current budget.
  • The S.C. Housing Trust Fund helps develop safe, affordable housing for low-income state residents. It’s funded through a fee levied when real estate is sold. The budget proposal would take $5.7 million from it for the next year. Lawmakers used $893,000 in the current budget year.
  • The Extended Care Fund (Barnwell Site) goes for monitoring and maintenance of the Barnwell site near Aiken. Consultants hired by the state reported last August that last year’s decision to transfer $49 million from the fund left it $48 million short of the amount needed to ensure proper monitoring to keep the site safe. Legislators want to use another $2.4 million in the upcoming year.

What should taxpayers think about the transference? Isn’t it odd that the money set aside to support these, so called, important obligations are not as important as we are led to believe?

Either that is the case or we elected a bunch of hucksters who will throw away money; give “Pork” to those who will benefit their reelection and refuse to take back hundreds of millions that were so magnanimously given to the Universities. The dropout rate of high school pupils is on average 50%. In Dorchester School District Two the drop out rate is just below 40%. No one can say that is a success story. Those that do go on to college have a dropout rate of just blow 60% after the first three semesters.

The public schools K-12 aren’t under-funded since there is so much layering of non-teaching staffs that haven’t contributed much to improve the poor test scores considering the money that is poured into the system. Billions for schools that look like Taj Mahals while only 50% of education funds get down to the classrooms according to a study by the South Carolina Policy Council.

In Dorchester County 73% of all property taxes collected go to the schools. The County Council hasn’t the expertise to go into details of the School Board’s obfuscated budget submissions and as a consequence the council becomes a rubber stamp for all intents and purpose. The state legislators are beginning to recognize the sorry state of how the schools are run and the enormous waste when the average of the counties spend in excess of fifty percent for purposes other than in the classroom. In one county only 34% of tax money ever reaches the classroom.

As a consequence of the SC Policy Council’s report, there is a movement to have the State Auditor investigate the schools in South Carolina. Maybe then we will realize that pouring money into an open maw of administrative featherbedding elites is not the way to balance any budget. If the truth be told, most teachers would agree that the entire system is overloaded with non-productive bureaucrats.

Why not slow the construction projects for one of the largest road systems of any state? This is the result of federal financing for new road construction, but no federal funds to maintain these roads. Politicians are elected on how many new roads can be built in even the remote areas of the state - regardless of the fact that way too much is needed to maintain these roads.

South Carolinians are rated as having the third highest income tax per capata income in the nation. The state’s sales tax is only five percent, but essentials such as food, over-the-counter medicine and clothing are not exempted which makes the state one of the highest sales taxed state in the nation. Now, the befuddled representatives are willing to add another 40% to the sales tax during a time when there is real suffering because of lost jobs, and a recession, perhaps leading into a depression.

What do you think? Should we keep electing special interest legislators or next time go to the polls and look seriously at those who want to raise fees on what appears to be another means of pidgin holing money later to be converted to the general fund. Think of it, they are willing to raid funds for the Barnwell site which, if not maintained, could result in massive sickness and death.

It’s obvious that their priorities need to be reversed where they are not so willing to raise, fees and taxes. State Government is a business and should be run like a business, not a socialist welfare state. Because there is no competition and a real public aversion to increased taxation, legislators and the governor must do much more to cut the size of government and the services it provides.

The volunteers within the church and private charities are much more effective in the distribution of welfare than any government run “great society” enterprise. Instead of trying to maintain the status quo, government should be planning to meet only the essential requirements to maintain order, safety and the services that only the state is capable of doing.

The days of the welfare state are about to end. This will happen either to avoid an economic collapse or after an economic collapse. One, of course, is preferable to the other.

J. H. Kress