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South Carolina taxes: General Assembly budget held the line, but watch out for state agency fees and fines

August 4, 2009 

When I ask people around the Lowcountry about their needs and concerns, one of the most frequent comments is their wish for less tax. While the economy gets harder to handle and the jobless rate soars, people are more and more concerned about what comes out of their paychecks and bank accounts to pay taxes. Most agree that there is a basic level of government need, but resoundingly, they tell me that there is too much waste in government.

This past session in the General Assembly, I was mindful of these concerns and fears. The South Carolina budget began at around $7 billion and ended up at about $5 billion in the few short months that the details were being hammered out. That's a drastic reduction in spending, and most importantly, it's a staunch effort by your House and Senate member to allow no new or increased taxes.

The task at hand was to stretch the existing dollars every way imaginable. Personally, I spent time looking for duplications of efforts and reporting and offered an amendment saving about $500,000 by simply not requiring duplicative reports and not printing them as well. This is small potatoes in the grand scheme of a $5 billion budget, but each one of those potatoes counts toward better use of your tax dollars.

Legislatively, state taxes were a large part of our discussion, and Senate Bill 12 was passed and ratified. This legislation puts together a study committee (Tax Re-Alignment Commission) to take a look at all of our state taxes. The 17-member commission is strictly defined and will not be made up of members of the General Assembly. Members must have experience in public finance, government budgeting and administration, tax administration, economics, accounting or tax law. They are to develop criteria for assessing the effectiveness of the current tax system structure, identify likely systemic impacts on tax revenues and report to the General Assembly. This report must be delivered no later than March 15, 2010, to the Senate Finance and the House Ways and Means committees.

This report will consider sales and use tax exemptions; assessment of state and local taxes levied and other provisions affecting state and local revenue; and any fee, fine, license, forfeiture or other funds. Additionally, the commission will study and make recommendations to the General Assembly of the advantages and drawbacks of a revenue-neutral replacement of the state individual and corporate income tax, state-imposed sales and use tax, estate tax, bank tax, savings and loan association tax, and taxes on beer, wine and alcoholic beverages with a broadly based consumption tax modeled on the proposed federal Fair Tax, as that form of tax would have to be adapted to apply on the state level. The report must specifically cite how a tax swap would affect jobs creation, savings and investment, and tax compliance costs.

Key to keeping more of our dollars in our own bank accounts is curtailing the current system of state agency fees, fines and other charges. These monies are collected all over the state from individuals and businesses, and they range from a few dollars to thousands of dollars but are almost completely unaccounted for in the budget process of our state.

These taxes come to us inside regulations that begin in a House or Senate committee, where they are discussed, debated and either approved or sent back to the agency for revisions. If they are approved, they sit for 30 days and then become law — so do all the new fees, fines and increases of existing fees and fines in them. Unless your representative is in that meeting, he or she might not ever know that fees were added or charged at all, and typically, there is no debate or vote on regulations on the floor of the House or Senate.

I filed House bill 3576 that would change that process and require any regulation with a fee or fine or an increase in them to come before the House and Senate for debate and vote.

I hear your cries and fear of more and more taxation. As your state representative, I will continue to hold the line on state spending and stop new taxes in the budget process. I will continue to dig out wasteful spending practices, duplications of services and will look to the Tax Re-Alignment Commission for its recommendations and push legislation to implement their report's advice.

My goal is for you to keep your hard-earned dollars. I will defend your rights of free enterprise and fair taxation. I will continue to say no to new taxes and work to reduce the ones you already have.

Rep. Shannon S. Erickson serves South Carolina House District 124 in Beaufort County. She can be reached at 843-263-1867.

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