Senate adopts tax overhaul bill

The Senate adopted a conference committee report Tuesday that establishes a comprehensive tax study commission. The vote was 41-3.

The proposed commission would consist of 11 members, none of them House or Senate members.

The House-Senate conference committee approved the measure unanimously, which will look at all the state's tax laws and exemptions, except for those covered under Act 388.

The measure must still be passed by the House, and if approved, would then go to the governor.

Tax reform bill OK'd by conference committee

A conference committee has approved a compromise bill to study the state's tax structure.

The 11-member panel would propose changes by next March in an attempt to make state revenues fairer and more efficient and reliable.

The compromise would not include changes to a statewide property tax reform bill for homeowners. The bill also does not give House Democrats an appointee to the panel.

The compromise must be approved by the House and Senate later today before heading to Gov. Mark Sanford.

Left off tax study panel, Dems vote to oppose bill

House Democrats voted Tuesday to oppose an amended Senate bill to study the state's tax system.

The Democrats' caucus voted to unanimously oppose the legislation, expected to come up for House debate on Wednesday, unless the House of Representatives agrees to restore Democrats in both chambers with the ability to make appointments to the study commission.

House Democrats also want the legislation to include a comprehensive review of the state's taxation system, including all income taxes, property and sales taxes.

Both minority party representation on the study committee and the review of all taxes were stripped from the Senate-passed bill, leaving only the House speaker, Senate president and governor -- all Republicans -- with appointive powers to the commission.

The amended bill now includes only a study of the state's sales taxes.

"Democrats want to have a non-political director (of the study commission)," said House Minority leader Harry Ott, D-Calhoun. "Otherwise, it injects politics right back into it."

The state is reeling from revenue losses during the current recession. Democrats blame, in part, recently passed tax reform that changed the basis of educational funding from property taxes to sales taxes, which have decreased sharply due to the recession.

Debate delayed on bill waiving tax penalties

A House proposal would allow county councils to delay, even waive, financial penalties charged to residents and businesses who pay their real and property taxes late.

Thursday, the House delayed debate on the bill proposed by Rep. William Sandifer, R-Oconee, who said the change is needed because of tough economic times. It would apply to tax bills beginning in 2008.

County councils would decide how long to delay penalties.

Senate debating tax reforms

The state Senate is debating a bill that would study the state's tax structure.

The bill would create a BRAC-style tax commission that will look at which mix of taxes -- sales taxes, property taxes and income taxes -- are best able to sustain stable revenues, keep S.C. competitive with other states and fund schools equitably.

Senators were debating how much power the commission would have to suggest changes to tax structure and what proportion of the Senate would have to agree to a suggested change to make it law.

Sanford to tout flat tax around S.C.

Gov. Mark Sanford will tour the state Wednesday to discuss his proposal for an optional "flat tax."

The plan, according to a news release from the governor's office,  "would allow individual South Carolinians the option of paying the current 7 percent income tax rate with deductions and exemptions, or paying at a 3.4 percent rate with no deductions or exemptions."

Sanford and lawmakers who support the bill will talk about it Wednesday in Columbia. Sanford will then travel to small businesses in Charleston and Myrtle Beach to discuss the tax proposal.

Sanford urges lawmakers to focus on DOT, workers' compensation, tax cuts

If the Senate and House are unable to reach a compromise on the budget, Gov. Mark Sanford Tuesday urged legislators to turn their attention to three other important issues: finishing up DOT and workers compensation reform and adding more tax cuts.

During a morning news conference in his office, Sanford scolded the Legislature for its plans to spend most of a $1.5 billion projected budget surplus, rather than rather than fulfilling unmet existing commitments on programs such a $41 million tuition grants program and individual tax relief.

"If they're gonna take a pause on the budget, let's go ahead and concentrate on DOT and workers' comp," Sanford said, referring to Rep. Tracey Edge's declaration Monday during a conference committee meeting that House and Senate conferees had reached an impasse.

The Senate and House appear far apart on all three issues. On tax relief, for instance, the House  plan returns $81 million in relief to taxpayers, while the Senate  plan returns $23 million.

Sanford said the Legislature has undermined its own credibility on fiscal responsibility.

"We've had brand erosion by saying one thing and doing another," the governor said.

Dems differ on how to spend cig tax revenues

House Democrats are eyeing different uses for money generated by a proposed cigarette tax increase.

While some Democrats are expected to oppose the 30 cents a pack increase that won initial approval last week in the House Ways and Means Committee, most are likely to support a hike. 

At issue is how proceeds from the tax will be spent.

As the bill currently is written, a majority, but not all of the money raised by a new tax, would be used to improve health care for low income residents under the Medicaid program. That has been a longstanding goal of state Democrats.

"If we pass a cigarette tax, a majority of it should go to health care," said Democratic Majority Leader Harry Ott, D-Orangeburg.

Ott said amendments to the cigarette tax bill, which is expected to reach the floor for debate on Wednesday, may diminish or phase-out health care in the bill and direct more proceeds to eliminating the food tax. Ott said proposals may also surface to phase in the tax over 3 years.

"First of all,  I don't think we need the money," said Rep. Herb Kirsch, D-York. "If we get it, all we're going to do is spend it."

The bill is designed to extend health care to working Medicaid recipients who are at 100 percent of poverty, instead of the current 50 percent. Ott said Democrats were to be polled for their support of the bill later today.

Budget faces changes to tax proposals

The House has finished work on the first half of the state budget, finalizing how much money state agencies and programs will receive.

But representatives have yet to begin the second half, which spells out how the money must be spent, and likely will work late tonight to finish.

House leaders say they are behind schedule from previous years and hope to take a key vote tonight.

Democrats have proposed a wave of amendments that would redirect the proposed $81 million income tax cut to road construction, economic development grants and other projects.

Those proposals have been rejected each time, but debate slowed to a crawl this morning.

This afternoon lawmakers expect a handful of proposals to raise the state's lowest-in-the-nation cigarette tax rate. The plans could range from a quarter per pack to as much as 93 cents per pack.

At least two proposals would use the money to lower other taxes, with one cutting the sales tax on groceries and another further trimming the income tax.

Sanford threatens to veto his own budget priority

Gov. Mark Sanford has told House Republicans he could veto an $81 million income tax cut because it would write a permanent law into the state budget.

Known as a "Part II proviso," House and Senate budget writers abandoned the practice because other legislation - including video poker - often was tacked on to the budget.

Sanford has opposed the practice of adding unrelated amendments to legislation.

Sanford says he is struggling with the decision to veto his top budget priority, one he's pushed for since taking office in 2003.

House leaders don't know whether they will change the way the tax cut is written.