State Chamber takes on Act 388. I wish it luck and success

A chart the Chamber shared in context of the issue. Source: Lincoln Institute of Land Policy and Minnesota Center for Fiscal Excellence 2019

A chart the Chamber shared in context of the issue. Source: Lincoln Institute of Land Policy and Minnesota Center for Fiscal Excellence 2019

I’m kind of busy at the moment, so I’m not going to rehash all the reasons why Act 388 was an execrable piece of legislation that distorted our state’s system of taxation and made it both unfair and ineffective.

You can go back and read where I’ve done it before.

But while I’m thinking about it, I wanted to make sure you read Ted Pitts’ op-ed on the subject in The Post and Courier. Ted — my former House member — is the head of the state Chamber, so naturally he’s against something that shifted so much of our tax burden from owner-occupied homes to businesses.

I particularly appreciate that in this piece, he emphasizes the extreme regressivity of the Act, causing renters to pay as much as three times as much in property taxes as homeowners do.

Anyway, just go read the whole piece. His column refers in the lede to a recent column on the subject by Cindi. Read that, too.

Both of them, being astute and fair-minded observers, see Act 388 as one of the worst things our Legislature has done so far this century.

They’re right. That doesn’t mean anything’s going to happen. It should, and Ted is right to point to the current discussions about how we fund schools as a great opportunity. But it’s a tall order. Act 388 is the kind of dumb, irresponsible legislation that makes lawmakers popular with some of their loudest constituents. The voice of reason seldom shouts that loud.

60 thoughts on “State Chamber takes on Act 388. I wish it luck and success

  1. Doug Ross

    Give me the bottom line – how much more will the average homeowner pay in property taxes? And please don’t use the $100K home price that is frequently used. I want to see the increase for $100K, $200K, $300K… that should be easy. Then let voters decide.

    It’s quaint to continue the old chestnut that all we need to fix schools is more funding. That’s not the problem — just like increasing the gas tax and the Penny Tax for roads has done little to improve roads. Funny how that works when you give more money to below average organizations mired in inefficiency, waste, and plain stupidity. The money WASTED now in education is the problem. We don’t need to spend more, we need to shift it from unnecessary programs to core education.

    Or how about this – let’s drop the hospitality tax completely since that isn’t as important as education. And THEN you can talk about raising property taxes. Priorities… that takes some actual thought than just grabbing more to waste.

    1. Brad Warthen Post author

      You’re missing the point, Doug.

      Owner-occupied homes are paying ZIP, nothing, nada for school operations. And business and renters are having to pay way MORE than they did before to run the schools.

      I know you hate the schools and all, but as long as we’re paying for them, don’t you think the burden should be fairly distributed?

      It was an insane tax shift. And it needs to be fixed…

      1. David T

        Really? I’m sitting here looking at my 2019 tax receipt that I received in the mail last week. If I’m not paying for schools, why is a section showing:

        School: 2019 Millage
        School 1 Operation: 322.400
        School Tax Credit: 0.00
        School 1 Bonds: 90.000
        Subtotal School: 412.400

        Now there areTax Credits for a large portion of the school taxes I paid, but I still ended up paying 18.97% of my property taxes for schools that I am not using.

        1. Barry


          1) Act 388 eliminated school operations property taxes in their entirety for all owner-occupied residential property

          2) Homeowners still pay for school indebtedness

          3) Everyone who lives or works in South Carolina uses our school’s in one fashion or another (every time you do anything at all in the state, you are “using” the schools.)

          1. David T

            Okay looking closer I see the credit erased the tax accrued by the millage rate. If I’m getting charged a millage rate and then getting a credit erasing the tax, why is it even on my statement?

            I’m still paying over $400 for schools that I don’t use. Give me an example of how I’m using schools? If I drive to work am I involving the schools (they do tie up my commute at times), buying groceries, walk my dog, eat out at restaurants? I talk to my neighbor, she works at a school so I guess that counts. I yell at the neighbor kids to get off my lawn, they go to school.

            1. Barry

              “why is it even on my statement?”

              Because the conservative South Carolina legislature that passed Act 388 wanted you to know how nice they are to you.

              “Give me an example of how I’m using schools?”

              What a silly question.

              Schools turn out and graduate productive citizens which reduces dependence on public health programs and cuts – by about six times -the rate of alcohol abuse.

              You benefit and “use” public schools when you engage in almost any activity in your community. You benefit when you go to the store, hire a contractor, use a bank, go to an arts show or concert and engage with public school graduates You benefit when an adult returns to complete their high school education though the local school districts adult program and is then Is eligible for a better job in the community.

              You benefit and are “using”the public school when a company relcoates and brings jobs, new talent, and economic benefits to Lexington County because the public schools are considered to be quality schools and executives want their children in quality schools.

              You benefit when a local kid attends a local school and graduates, goes off to medical school and then returns to the local community to serve local residents from his/her hometown.

              The benefits are too many to mention.

              And Yes, you should pay for it and not freeload.

      2. Doug Ross

        “I know you hate the schools and all, but as long as we’re paying for them, don’t you think the burden should be fairly distributed?”

        That’s a cheap shot. I don’t hate schools.. I hate the bureaucrats who run them and have wasted millions of dollars not focusing on core education requirements. Richland County District 2 has spent over 500 MILLION dollars on brick and mortar for state of the art campuses while the actual education inside those buildings hasn’t improved a lick,

        As for “fairly distributed” – we go over this a million times. We already spend more per pupil in the worst districts and the results are still terrible. Allendale hasn’t improved. Why is that so difficult to accept? You could quadruple the spending in the worst districts and the results would be negligible.

        And you refuse to accept ANY attempt to even TRY vouchers — even on a test case in the worst districts. Even John Kasich understands that is the only path to educating more students. We should be trying all sorts of techniques… but the reality is that we have too many poor people having kids they can’t raise properly to give them a home environment that supports education. By the time the schools get those kids, they’re doomed already.

        I’ll ask again – how much more do you want an owner of a $200K house to pay? If you can’t answer that and just deflect it to the legislators, then stay out of the conversation. If it’s $100, ok. If it’s $1000, I’m opposed.

        1. Mark Stewart

          I want a $200k house to pay what they did before 388 upset the apple cart. And I want $1 and $4 million houses to pay as they did, too.

          That’s not so hard to see, no?

          What’s that point in owning a home in a state with a wrecked economy anyway? 388 was passed so retirees on the coast, around Lake Murray and in the mountains could pay lower taxes. The rest of it was just reordering the deck chairs on the Titanic to confuse and placate people.

          1. David T

            “What’s that point in owning a home in a state with a wrecked economy anyway?”

            Work harder and maybe you can move out of your parent’s house. But I will give it to you, nobody can point fingers at others better than you.

            1. Barry

              David, we know you are a reflexive and robotic supporter of “republicans” but if you paid attention to local news you’d know even most republicans in the general assembly believe Act 388 is a mess and has had loads of unintended (bad) consequences. They just aren’t willing to fix it and aren’t sure how to dig out of the hole.

              1. David T

                They must be doing something right, because I drive past two brand new schools almost everyday. “We can’t afford xxxx”, yet up goes another multi-million dollar school with million dollar sports facilities. Maybe they have enough money and just need someone who is better at budgeting.

                1. David T

                  “You just accidentally described one of the big problems with Act 388.”

                  Which is what? Because I’m not reading all that to try and figure out what you’re implying.

                2. Mark Stewart

                  Try this for a bite-size morsel:

                  “The residential growth is a boon for county coffers, but presents a double whammy for the school district, said its board Chairman Bobby Parker.
                  That’s because local schools get no tax benefit whatsoever from new residential property taxes. And at the same time, the district is responsible for educating the children who live in the new homes.
                  The county, Parker said, sees one new house on the tax rolls, while the schools see only the multiple students living inside it.
                  “The residential [growth] has killed us,” a frustrated Parker said, noting that school district asked voters for a bond referendum to pay for several new schools…”

      3. Mark Stewart

        388 s one of those issues that most people are just fundamentally ill-equiped to process. It requires one to take a holistic approach, and that’s just not what most people can do.

        The law was passed because it “appealed” to single family homeowners. But most of them didn’t understand that 388 only really did one thing – radically reduce real estate tax rates on the top 10% of single family homes. Yes, it reduced taxes on more houses than just those but not really by as much.

        The graphs of Charleston, Charlotte and Atlanta show how much 388 has skewed real estate taxes toward a very unbalanced foundation. They also show what an absolute fiscal killer the gonzo industrial incentives SC gives away have become under 388 reallocation. More and more existing commercial & manufacturing jobs will be pushed out of state as the tax rates grow higher for existing companies and stay low for new arrivals.

        The whole thing is untenable. But good luck trying to get most people to see the bug picture.

        1. Doug Ross

          I don’t subscribe to the notion that real estate taxes should be based on property value. Every resident gets the same access to the same services regardless of the value of the home. Taxes should be per dwelling, not based on estimates of perceived property values. There is no logical explanation for why two homes, side by side, should pay different property taxes. A single dwelling tax would be far more equitable… and add an impact fee to every new dwelling/apartment as well to cover infrastructure costs.

          Imagine how accountable local politicians would have to be if every November, they had to announce what the new dwelling tax would be for the coming year. Everyone would be able to assess whether they were getting good government for their money.

    2. David T

      Oh come on now, ACT scores across the state have gone up by 0.1 points. Just disregard that they’ve dumbed down the ACT test so more people will score higher. It’s kind of like high schools that now use the 90-80-70-60 grading score. Why I remember when grading was done on a 94-88-82-76 score. Now what used to be an F is a C. And don’t get me started on the 5.0 vs 4.0 GPA. Money spent on schools has proven to be a waste of money, the only way scores go up is to lower the expectations. USC has more than one Master’s program where they’ve implemented a mandatory writing course for first year Master’s students… because students are coming in with Bachelor’s degrees who still can’t write using APA format.

        1. David T

          Yes you got it, I was doing my angry old man routine… and we were smarter back then than kids today. We knew how to write cursive and drive a manual transmission for starters. Now if you’ll excuse me, I have clouds to yell at.

          1. Barry

            “and we were smarter back then than kids today. We knew how to write cursive and drive a manual transmission for starter”

            1) no, you weren’t (and aren’t)

            2) writing in cursive and using a stick shift is not a matter of intelligence. It’s a learned skill. Physicians could write a prescription in cursive that other equally intelligent physicians could not decipher.

  2. bud

    I’d really like to know more. Some industries get big tax breaks, Boeing for instance. Seems like those breaks give a competitive advantage based on company size and political clout. Perhaps a break for smaller companies should be considered to level the playing field. Why Amazon should ever get a tax break is beyond me. Also, the gap between renters and owners is pretty big. Perhaps give starter home owners a break so home ownership could be easier. But for the McMansion owners I’d tax them at a very high rate in order to discourage big carbon footprint issues.

  3. Doug Ross

    The correct property tax would be a flat fee per dwelling. Why should it matter if a resident lives in a two bedroom apartment with three kids or a single family home regardless of size or value? Makes zero sense. A flat fee would eliminate the ludicrous concept of millage and make the cost of local government more transparent and accountable.

    Convince me that I should pay more for local government because my house has 100 more square feet than my neighbor. That is the essence of the stupidity of government.

    1. Doug Ross

      Property taxes should be flat: per car and per dwelling, not based on estimated value. Sales taxes should not be broken up into “a penny for this, a penny for that”.. let elected officials do their jobs and apportion them as needed. And income taxes should be flat with no deductions, just a couple brackets that kick in at some multiple of the poverty level.
      We would have so much more money to spend on actual needs instead of mindless bureaucracy.

      1. Barry

        “Property taxes should be flat: per car and per dwelling, not based on estimated value. ”

        Such a scheme has such low support with the public it’s never even a consideration (not considering the obvious problems with such a system)

        1. Doug Ross

          What are the obvious problems? That people would have to pay their fair share for the services they receive? Explain to me why I should pay more for local government than someone who lives in a trailer home? “Have more, take more” is not a great philosophy.

    2. Mark Stewart


      It is astounding that you continue spouting this nonsense. I bet you’re good at this kind of exercise, so give it a try: diagram out the societal implications of taking your approach. Don’t think about it as you yourself in your home. Think of people across the income and asset ranges. By the third iteration I bet you have failures throughout. There is a reason for that. It starts with the soundness of the idea.

      1. David T

        Yeah Doug, what Mark said… stop thinking about it logically and start looking at it like a good Socialist. Pay your share and the share of those who are less successful than you.

        1. bud

          stop thinking about it logically and start looking at it like a good Socialist.

          There it is! Let the name calling begin. Seriously can’t we ever have a nice fact based discussion without resorting to these ridiculous ad-hominem attacks? I don’t really know all that much about 388 but now it is clear the pro-388 folks have no real argument. Way to lose an argument David.

          1. Doug Ross

            Well, David’s heart is in the right place. A system that skews payment toward those who have earned more, saved more, invested more to subsidize the government services of others is closer to socialism than it should be.

            1. Brad Warthen Post author

              Well, there are a lot of ways I might describe the “I’ve got mine” outlook on life, but having one’s “heart… in the right place” isn’t one of them….

              1. David T

                Face it, for most of us had we worked twice as hard we would all be twice as successful, the same goes for working half as hard and being half as successful. If people would work to 90% of their potential rather than relying on someone to pick up their slack we wouldn’t have to have these discussions.

              2. Doug Ross

                I already “give” more than most. So I haven’t got “mine”. You just want me to give more. Your benevolence with my income doesn’t get you brownie points.

                We can all post our tax bills if we want to discuss who’s contributing the most. My taxes consume 40% or more of my income. That’s plenty.

          2. David T

            “There it is! Let the name calling begin. Seriously can’t we ever have a nice fact based discussion without resorting to these ridiculous ad-hominem attacks? ”

            That’s what you’re calling name calling” I guess you’ve never been in a discussion with Mark Stewart who’ll call you an idiot and ignorant at the bat of an eye.

      2. Doug Ross

        I have thought about it for many years… and every time I get my new tax bill for the coming year.

        I want you defend having a system where every home in a neighborhood pays a different property tax. Talk about nonsense. Only a government agency could come up with something as unnecessarily complex and bureaucratic as that.

        Are you suggesting that requiring people who live in apartments should pay less than those who live in homes? Why? Other than MAYBE reduced requirement for Fire Department services (which are rarely used by anyone), what else are they missing out on? Same schools, same roads, same parks, same police, same everything. I pay 300 a month for property taxes. in Richland County. How much do you want me to pay?

        1. Doug Ross

          The concept of “use fees” is common in government. We pay the same fee for a drivers license or marriage license. My proposal is to implement a use fee for living in a dwelling in a county. The use fee gets you access to schools and other amenities of the area.

          I’d like to find the data that shows total property tax revenue from homes/apartments in Richland County and then divide that by the number of homes/apartment units to come up with what the fee would be. Hopefully, no one would suggest that some people should pay nothing to live in the county.

          1. Doug Ross

            Cars should be handled the same way. Eliminate the sales tax cap so that expensive cars pay more.. then charge a flat per vehicle use fee and use that plus a gas tax to fund roads. Property taxes are evil.

        2. Brad Warthen Post author

          “I want you defend having a system where every home in a neighborhood pays a different property tax. Talk about nonsense.”

          If every home in a neighborhood paid the same, that would be nonsense — unless the houses were all exactly alike and had equal value…

          1. Doug Ross

            You didn’t defend the system. You described it.

            Defend the nonsense part of it. You believe two homes, side by side, should pay different amounts for local government services because…

            Waiting for the “you have more, you pay more” rationalization…

            1. Doug Ross

              Also, should a person who owns a paid off $150K house pay less in property taxes than a person who owns a $250K house with a $200K mortgage? The latter is only WORTH $50K to the owner.

              The concept is brain dead. What other tax is based on the estimate of value — not what it could be sold for, not what the asset is actually worth when loans are deducted … it’s just plain dumb.

              1. Mark Stewart

                It’s irrelevant how an asset is financed. The market value determines it’s value. People finance in order to capture the current/future value that they perceive in a property.

                The person with a $150,000 debt=free property could, if they had other assets or income, buy a $600,000 property – or they could choose to hold what they have. The choice is theirs, isn’t that Libertarian?

                1. Doug Ross

                  There is no market value until you sell an asset. Did we see property tax valuations drops in 2008-2011? I don’t recall that happening with my house. My taxes never dropped that I recall.

                  And trying to fight the estimated value with the assessor is an exercise in futility. I tried once. It was a typical experience of dealing with unaccountable, unmotivated, unthinking individuals.

            2. Mark Stewart

              There are a couple of compelling reasons to have graduated property tax rates.

              One, a flat per unit tax would inevitably result in the following: High priced property would become more and more valuable as people trade the “equity” they are blessed with as a result of paying a fixed tax rate to upgrade to even more expensive property which pays no more in taxes than the last, further juicing the value. The converse is also true, a flat per unit property tax would immediately cut the value of a lower than the median property as the property taxes are more onerous. This creates an ever more depressive levering on the lower priced properties. You see the massive bifurcation of the market, right? It would be like share-croppers and plantations – and not much in between.

              Two, property taxes tied to value have a benefit to the overall market. They help “recycle” underutilised property back into the market. In other words, property taxes based on the value of the asset encourage people to use the property more wisely. If you had a flat property tax, people owning property above the median would be encouraged by the tax benefits to continue to hold the property even if they no longer “need” it. That distorts the market and drives up prices. The flip side is also true, fewer buyers would be attracted to lower than median properties, thus further eroding their values.

              It really bothers retirees that property taxes are “high” and go to useless things like schools. But there is a societal benefit to value-based property taxes, they encourage people to think “do I really need to maintain the family home” after the family has grown and moved out? It’s a gentle way for people to be encouraged to make that decision earlier than they might otherwise. This again is a positive for the market – and society. A flat tax totally distorts this natural recycling process where property moves to those who value it.

              A flat tax is best described by Chaos Theory. One doesn’t even need to understand this modeling to get that that is a bad thing all around, right?

              1. Doug Ross

                You’re presenting a theory that assumes you know exactly how markets would work in that environment. Using words like “onerous” is hyperbole. Let’s see the real numbers. What would you expect a $120K bottom level home to pay in taxes in Richland County in a per dwelling situation as compared to now? If it adds $40-50 a month, is that “onerous” (don’t tell me it is if the house also has cable TV).

                Do you really believe someone who lives in a million dollar home is going to make a decision to stay or move based on a few thousand dollars tax difference?

                As I said, I think we would see better, more accountable government if there was a flat fee. That is an immeasurable benefit. If on November 1, the Richland County Council had to come out and say “Next year, the per dwelling fee will increase from $1000 to $1100”, it might spur people to pay more attention. As it stands now, they can hide behind the complexity of millage and estimates of market value.

                1. Mark Stewart


                  It’s kind of a nonsensical question. How would you tax commercial property? Or multi-family properties (rentals and/or condos)? Why not have a pole tax on all adults – or maybe include all children, too? Would you count the Cockaboose railroad? I jest, but you see the point, right?

                  Let’s just take Richland County residential, where there are probably residential properties valued from $7,000 to $10 million – a huge spread. The Census bureau says there are about 175,000 housing units in the county. The combined budget of the County, Richland One and Richland 2 is about $2 billion. Let’s forget the other free-wheeling agencies, this captures most of the tax revenue. So the math works out to about $11,260 per household.

                  As you like to say, pick the number you are comfortable paying… Which part of the tax revenues should be allocated to residential? And should the 50% of the homeowners be treated the same or different than the 50% of the renters and/or condo owners?

                  BTW – the county taxes on a per capita basis are about $4,900, just for the giggles.

                  Taxing property by value may not be the cleanest method in your eyes, but is a different approach than income taxes and sales taxes. It’s a complimentary alternative that benefits some and not others. Between the three tax methods most people probably worry most about two of these and don’t worry about the other one. Seems pretty fair to me.

                2. Barry

                  “Do you really believe someone who lives in a million dollar home is going to make a decision to stay or move based on a few thousand dollars tax difference?”

                  Republicans tell us constantly that business owners make those big decisions based on tax rates as if they would sit in their recliner under the bridge all day if the tax rate was 4% higher.

                  So yes, I’d expect that many do make decisions based on the amount of property tax.

                3. Doug Ross

                  “The combined budget of the County, Richland One and Richland 2 is about $2 billion. ”

                  Is that entirely funded by property taxes? I don’t think so. There are all sorts of local taxes and fees and car taxes, etc. that are likely part of it.

                  What I want to see is the total dollars of home property taxes now and the number of homes that contribute to that amount. That’s the math that matters. Then let’s see how much of an average apartment dweller’s monthly rent goes toward the tax bill of the property owner. Any idea of what % of a $1000 rent would be to cover taxes?

                  1. Bryan Caskey

                    According to this County Budget Report, “Property taxes are Richland County’s largest revenue source making up 75.1% of the revenue in all funds combined and
                    60.6% of the revenue in the general fund in FY 2018.”

                4. Barry

                  “that’s why you’re not rich.“

                  I notice you avoided the point.

                  Define “rich”

                  You might be surprised.

                5. Mark Stewart

                  I dug into the topline county figures while doing my day job. The Property tax revenues you seek are in the budgets – go find them!

                  I agree with you that this would improve the analysis.

                  I don’t know about your apartment question, but rentals and condos are taxed like commercial property (which is why developers build more townhomes btw). So that’s multiples of single family taxes.

                6. Doug Ross

                  Thanks, Bryan. So property taxes include cars as well and I know based on my own family, that’s probably a good 25-35% of the total. So now we’re getting closer to a magic number. Mark says the number is 2 billion, So 75% of that is 1.5 billion. and let’s lop off a couple hundred million for cars, boats, etc. I also know that when I had a business, I paid Richland County property taxes for equipment.

                  I still don’t understand why an apartment dweller should pay less in taxes for the services they receive than a homeowner. As I said at the start, the only difference is that their need for fire department services might be less. A three bedroom apartment should be treated no differently than a 3 bedroom home.

                  Let’s say when we get to the bottom line, we find out a flat tax of 3000 per dwelling was the number. So $250 a month. Isn’t that a reasonable price to pay to live in the county? Good schools, good libraries, police protection, parks. That’s about what I pay for cable and internet.

                7. Barry

                  “No I won’t. You might not even exist.”

                  I certainly exist but I’m still not meeting you somewhere Doug to prove it. I’m married.

          2. Doug Ross

            And the value of the home doesn’t reflect the assets of the person who owns it.

            While you’re at it, defend the idea of senior citizens getting tax breaks based on age.

            1. David T

              Or tax exemptions for things like churchs and universities. I could start the Church of Trump, buy up a six acre section of downtown Columbia and not pay a dime to Richland County. Just ask all the good reverends in the State House.

  4. bud

    I think we can wrap this topic up. Here are the arguments for and against progressive reform or our property tax code:

    1. Renters pay far more than owners. Worse, many renters are lower income thus the current system is highly regressive.
    2. Businesses, especially small businesses pay more. This is partially offset now since many huge, new businesses get ridiculous tax incentives.
    3. The low tax rates on owner occupied homes acts as an incentive for people to remain in a house longer than is optimum for the economy. This serves as an artificial negative for the housing market.
    4. Ridiculous flat rate ideas are disruptive to the economy for several good reasons but primarily that would make it harder on low income people. Taxing wealthier home owners at a higher rate (not just the same rate based on home value) would serves social positive.
    5. Low taxes on large homes encourages large homes to proliferate thus elevating the carbon footprint of the community. This alone is reason enough to have high tax rates on large homes.

    Arguments against progressive property tax reform:

    1. Rich people would have one less thing to whine about. This could have an adverse effect on the lobbying industry.

    1. David T

      “3. The low tax rates on owner occupied homes acts as an incentive for people to remain in a house longer than is optimum for the economy. This serves as an artificial negative for the housing market.”

      Since when has there been a limit on how long a person should live in their house for national economic reasons?

      bud, when is your house going up for sale? I believe you’ve overstayed your time for the national economy’s sake.

      1. Barry

        “Since when has there been a limit on how long a person should live in their house for national economic reasons?”

        every tax is designed to spur some sort of activity seen as preferable in the marketplace.

        It’s not a mandate.

    2. Mark Stewart

      Bud, I agree with your points 1-3. I also agree with the first half of the part 4. I think the idea of a graduated rate on top of graduated values is a hard sell. But, and David T will love this, I might not be opposed. It is not something that doesn’t deserve consideration to fix this mess. Point 5 is an interesting idea. I don’t even think Liberal bastions are doing this yet, but I wouldn’t be surprised if this concept takes hold over the next 30 years.

      That said, the dirty secret in SC is whatever one does, buy at least 25 acres of land. So when one is wealthier, this helps. An estate is taxed as a farm. A Mcmansion is taxed at full market value. The differences are staggering.

      I forget who that Town of Lexington corrupt pol was a few years ago, but it always amused me that he drove a truck with a “farm” plate. He knew how it works. Build a big house on a big piece of land and have everyone else subsidize ya. Ain’t it beautiful?

  5. Mark Stewart

    I never explicitly said this, but I commend Ted and the Chamber for taking on this important and politically fraught issue about the sinkwhole 388 is driving us into. This isn’t just a business issue, though in fact it also splits the business community, but is a serious issue about our state’s long-term future. Well, yours. I live out of state now. But this issue makes me want to quit and move back and work in this. It’s really that important of an issue. And one most people still do not understand. Bud, for instance, struggled with the concepts but he’s now got a pretty good appreciation of the plight we are in. So kudos for digging in on a tough one!

    I will add this last point about 388. I believe Barry has eluded to the point but it bears stating plainly. 388 has created a situation where the counties’ fortunes and the school districts’ fortunes are no longer conjoined. This is highly problematic. The counties and municipalities want residential (voter) growth and new home development of all kinds (except of course when NIMBY neighbors don’t). The school districts rely on commercial development (from which the counties don’t benefit as much). These viewpoints do not always mesh well. Most new construction single family houses end up containing >2.0 kids whithin a few years. However, the artificially low residential real estate tax rates under 388 don’t in any way cover the headcount costs. So every new home (especially in the dynamically growing areas – ie where the jobs are) are seeing schools killed by the student counts; and counties and towns happy to have the revenue which is plenty to cover added municipal infrastructure, but nowhere near enough to cover education expenses.

    388 doesn’t just crush our parts of the state with relatively less commercial development, it also perversely harms high growth areas as well. No one wins under this tax regime. No one. The problem is, single family homeowners – especially the wealthier ones – think this is too good to be true and continue to fight repeal. That, ultimately, will torpedo not just the schools, counties and the state itself, it will inevitably drag down the value of single family homes as well. Like Detroit, however, they will be the last to fall. Then they will fall hard as it becomes a race to beat the light switch.

    This is a serious issue for everyone to grape with. The trick is to find a way to increase taxes on single family homes, which sounds like being a lunatic and trying to get out of an asylum. It’s like a horrible Greek myth. But it is what SC has walked into – an economic buzz saw…

    Will the politicians risk their necks to save their state? I’m not holding my breath …

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