Monday, February 22, 2010

Tax penalties based on average wealth is unfair

Bluffton Today

We had something of a calm spell this week as far as calls and e-mails on local issues are concerned. This is probably for the best as we had a pretty intense week of working over bills in committee, especially those related to jobs and job recruitment.

One bill in particular, H4478, received a lot of attention as it will potentially become an allencompassing job enticement act that will describe how we recruit companies from small engineering shops all the way up the scale to the next Boeing or BMW. As we arrived at Section 16 of the bill, there was language that raised big red flags for me. The cost/ benefit aspect of this bill was based on an area’s “ability to pay” as opposed to more rational or equitable criteria such as average weekly wage.

If this sounds familiar, it is because this same language is found in the Education Finance Act of 1977, which has bedeviled Beaufort County’s financial relationship with the state in paying for public education. The intent of the act was to equalize the burden of school finance among the various counties of the state. It is not unreasonable that more prosperous counties might pay a somewhat larger proportion than poorer counties to support the public schools. Unfortunately, the part of the act called “the Index of Taxpaying Ability” has evolved over the years to the point where we in Beaufort County have found the portion of state dollars returned to us has dwindled to effectively nothing. I have a hard time believing that was the intent of the legislation. Unfortunately, the “ability to pay” criterion is not isolated to education.

Needless to say, your representative took serious exception to Section 16 of H4478. In fact, after 45 minutes of discussion in Ways and Means, it was decided to omit the section completely. I am always a little surprised to have to explain to my legislative colleagues about the wealth distribution in Beaufort County. There are certainly a number of wealthy folks in our county, and they contribute a great deal to the community. However, the overwhelming majority of residents in our area are middle class working families, retirees, and active military. To give us a tax penalty based on an average wealth is simply unfair. If Bill Gates happens to attend the sold-out performance of May River Theater’s “Pal Joey,” then each person in the auditorium would be worth over $100 million on average. That’s an extreme example, but that is often the perception we are facing.

On a positive note, H4478 does include a tax credit for solar electric generation and high efficiency equipment. I will keep an eye on those features and keep working them forward.

The budget gets started this morning and I will be in Columbia five days this week. As we dissect the budget, I always pay attention to how each piece will affect Beaufort County, District 118, and also what might be called the greater good. In all my years of work in the legislature, there has rarely if ever been a sliver of daylight separating those three constituencies.