TABOR Alert: South Carolina


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As we noted in last week's Digest, South Carolina will likely face a budget deficit of roughly $430 million in the coming fiscal year. Predictably, this has prompted some, including Senate President Pro Tem Glenn McConnell, to call for a constitutional amendment to limit state spending. Similar proposals have been offered before in South Carolina and in other states. The only such limitation that has passed in any state is Colorado's so-called "Taxpayer Bill of Rights" or TABOR. The result for Colorado has been a dramatic deterioration in essential public services and the state chose to suspend that limitation in 2005.

More to the point, as Cindi Ross Scoppe of The State points out, South Carolina's real problem is not runaway spending, but a deeply flawed tax system. Among the tax policy challenges that South Carolina must address are limitations on property tax growth and property tax assessments, wasteful tax breaks for profitable corporations like Michelin, and an excessive reliance on a sales tax that fails to tax services adequately. ITEP's Issue Briefs can help to explain the shortcomings of South Carolina's approach to property and sales taxation - and what can be done about them.

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