February 10, 2012

Realtors/taxpayers fight reassessment method

More than 200 Realtors from all over the state gathered at the statehouse Tuesday afternoon to urge the Senate to support changes to the state’s property tax assessment methods.Nick Kremydas is Executive Director of South Carolina Realtors.

He says a property tax bill passed in 2006 had unintended consequences on the sale of property. That law, the current law, automatically triggers the reassessment of property anytime it transfers.   “This law has amplified the affects from the downturn in the economy.  It has dampened not only residential sales, it has been devastating to commercial properties.  And there are many examples in Columbia today where buildings are at a disadvantage because of point-of-sale assessment.”

Kremydas says all properties were under-assessed prior to 2006, so the change was quite a shock to the market. He says some home and business values were bumped up 200 percent and more, overnight.   “You’re talking about developers, investment, economic development.  This has been driving projects to North Carolina and Georgia.  It has had a devastating impact.” 

The bill would eliminate large jumps in assessment, above 15 percent, but would only apply during the first time that property is transferred. It would also only control assessment for five years.

But some groups want even more of a tax change. Dan Harvell is Vice-President of the South Carolina Association of Taxpayers and Chairs the Anderson County Taxpayers Association. He was also a founder of NoHomeTax.org several years ago when that organization pushed for the removal of all property tax on South Carolina homes. With the addition of a one cent sales tax, all operational taxes were removed from primary home owners. That group’s push also led to the removal of tax on groceries.

Harvell’s group wants a proposal that would favor primary homeowners even more.  “As it is now, the first transfer of property is free of point-of-sale reassessment to free market value, but subsequent transfers are at full-market value.  That’s a disadvantage to the taxpayer and a windfall to local governments and education on the six percent property.” 

Harvell says the addition of just one more cent of sales tax would eliminate all property tax on homes.

Sanford takes red pen to budget bill

As expected Governor Mark Sanford Tuesday vetoed several sections of the state budget that compelled him to spend stimulus funds. Sanford says the budget failed to put South Carolina in a better post-stimulus financial position.

Sanford says that from a White House standpoint and from an Attorney General standpoint the law is clear giving governorships across the country discretion over a portion of the stimulus money. Sanford says the executive office in the state, including the Governor’s cabinet has legal discretion over federal monies from several programs. Sanford says with the General Assembly’s inclusion of the stimulus money he has not applied for in the state budget state legislators are wrongfully challenging his discretionary powers in dealing with the stimulus funds.

“But in this case because the legislative branch says we don’t like the way you intend to use these monies, we’re going to usurp that authority, the logical question would be, then why have a Governor? In other words, this is an unusual and unprecedented step forward in the degradation of the balance of power that is vital to a functioning government.”

Sanford is adamant in his belief that a compromise will be hammered out that will include an increased amount of funds going toward paying down state debt. Sanford refused to say that a court fight was eminent.

Sanford says if the state goes down the road that the present budget bill sets, South Carolina could find itself creeping toward a billion dollar hole in just 24 months. Sanford says this a unique opportunity for the state to pay down debt with the windfall of federal funds coming into the state. The Governor noted that the state is 4th in the nation in the amount of state money allocated to debt service.

“A full 11 percent of what we spend every single year goes not to teachers, not to health care, but to debt repayment. it means it’s going to interest for a bond holder in New York or Zurich as opposed to a teacher in Gaffney or Greenville.”

Sanford says if you start to pay down some of the debt, you would end up with a $168 million dollar savings in just the first 2 year alone that could then go to education and health care.

Sanford says the state is being bombarded with messages from a number of groups with numerous political agendas that wrongfully say that the state would lose the stimulus money to other states if they don’t use it now.

“If we don’t spend the money it is going off to some other state and that is just categorically not true. We have 18 months to come up with some compromise on how we spend the money. I think it’s inconceivable that we can’t come to some kind of solution and compromise on this thing before that 18 monthly window closes.”

Sanford also vetoed the newly created Capitol Police Force and the prohibition on the Highway Patrol recouping costs from game day and special events traffic control.

Sanford says he truly believes that his vetoes have a solid chance of being sustained. ” The fact that you got to essentially to the 50-50 mark in the senate, which is a place we never came remotely close to before on these kind of budget debates, says we’re awfully close. With what allies we have on the Senate side, it’s a two vote swing pretty much one way or the other, which is to say that it is close. If there is enough public pressure out there indeed this could very well be a different outcome that what we’ve seen in budget vetoes.”

Sanford separately vetoed 47 provisions in the budget he says continued wasteful practices, represented misplaced priorities and made inefficient structural changes.

Ludwig’s bail revoked for contempt

Greenville businessman John Ludwig, who is charged with murder for driving his Maserati into a house and killing the man inside, had his bond revoked this afternoon and was taken back into custody. A judge ordered Ludwig back to court for an emergency hearing hours after he was released.Ludwig was ordered back to court because of changes to the judge’s bond order. In the section where he had to initial the conditions of his release, Ludwig wrote, “no electronic monitoring” and “no porch arrest” in the margin.

The judge expressed his concern that Ludwig “doesn’t respect authority” and sent him back to jail, charging Ludwig with contempt

Supreme Court rules for SC Consumer Affairs

The South Carolina Supreme Court recently ruled in favor of the South Carolina Department of Consumer Affairs, who argued that Lexington Law Firm based out of Salt Lake City, Utah was illegally offering credit counseling to citizens of the state. Since the law firm is not licensed to practice law in the state, they must apply for a special license for credit counseling from the SCDCA according to the consumer Credit Counseling Act of 2005. Maria Audus of the SCDCA says this is a victory for South Carolina consumers.

“Those protections were designed because there were a number of abuses in the credit counseling and debt management industry several years ago which prompted the legislature to pass that law,” said Audus. “It’s just really exciting for us to see the Supreme Court uphold the act and see the importance, especially in this economy with consumers turning to credit counselors.

“They need to know that those people are acting according to the law.”

Audus says had the law firm did not practice law in South Carolina, they were not exempt from needing a license for credit counseling. According to Audus, “That what the Supreme Court found and that was our argument as well that they were just offering the credit counseling services and that was their only offering.

“Had they been licensed to practice law in South Carolina and had they actually been practicing law as a regular course of business, then obviosly they would have been exempt.”

The SCDCA now turns its attention to helping those counseled by the firm in retrieving their fees. “We’re in the process of helping them,” she said. “We issued nearly $1.4 million in refunds for consumers under this act since 2006. Here’s another situation, again, where we’re going to go and look and see which consumers were affected by this because, as the Supreme Court found, this organization was not licensed to charge them fees for their credit counseling services.”

State budget hangs up hotline

The state of South Carolina needed $287,000 for a hotline to report illegal immigrants- that’s not going to happen. “We just didn’t have $280,000 to put into it. We’re general fund revenue, we’re from $7.1 billion last June 1, to estimated down to $5.8 and you know the story behind our budget woes, there just wasn’t enough sufficient money there to do it,” says Senator Larry Martin of Pickens.

Martin says the state has no authority to deport anybody here illegally, but this hotline would have helped at least report the activity.

“Keep in mind this is not for us to deport illegal aliens under state law, this is for the reporting of suspected illegal conduct under employment laws, and under, particularly the illegal immigration bill that we passed last year,” says Martin.

Martin says residents can still report illegal immigration activity, but just not on the hotline.

“It doesn’t forestall that reporting, what it does do, you don’t have the hotline, the 24 hour, 7 days a week hotline building a database of where these complaints are coming from,” says Davis.

The Commission on Minority Affairs was set up to operate this hotline that Martin says could possibly be transferred to another agency in the future.