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Senators spar over major property tax rewrite as panel-backed homestead increase advances
Summary
After hours of floor debate, the Senate adopted a finance committee report and several amendments advancing a proposal to raise homestead exemptions and change assessment rules; a high-profile amendment would add targeted relief for younger buyers and create a levy-cap mechanism while reducing state reimbursement to local governments over time.
Senate members spent a large portion of floor time debating a substantial property-tax overhaul that would raise the homestead exemption and change how residential property is assessed.
The measure, introduced as a committee substitute for the bill from the senator from Cherokee, would increase homestead exemption amounts and keep the age-based eligibility at 65 while imposing a five-year residency requirement for new beneficiaries. Finance Committee chair Senator Lawrence told colleagues the committee's report would target about $258.5 million in additional homestead relief through the state's property tax relief trust fund.
The debate intensified when Senator Bennett of Dorchester offered Amendment No. 3, which would (a) maintain an increased exemption for seniors, (b) extend a $100,000 homestead-like exemption to certain younger homeowners (the amendment text as filed used an 18—1 age band), and (c) replace the state's assessment cap with a levy-cap approach that values every property at fair market value and then sets a revenue-neutral millage so long-term owners are not forced out by sudden reassessments. "Let's not do an assessment cap. Let's do a levy cap," Bennett said, arguing the proposal preserves mobility and equalizes valuations across neighbors.
Supporters said the package addresses long-standing inequities that leave two identical homes paying widely different taxes because one sold more recently. Opponents warned the plan could be gamed by newcomers, questioned the arbitrary age cutoff for younger beneficiaries, and pressed for precise fiscal modeling. Senator Johnson (York) summarized one concern: lowering taxes for some groups can attract new residents and shift the statewide fiscal mix, including greater demand for health and public services.
Bennett acknowledged the concerns and said counsel had reviewed some gaming scenarios; the amendment also proposes to phase down the state reimbursement to local governments over a 10-year period rather than hold them harmless in perpetuity. "We can't hold harmless in perpetuity for poor tax policy in the past," Bennett said, describing the proposed step-down as a way to wean localities off indefinitely-defensive reimbursements.
Several senators pressed for more detail on the amendment's local fiscal impacts. Senator Devine (Richland) and others noted that some counties rely on a significant share of property revenues and that reduced state reimbursements, combined with near-term growth pressures, could strain local budgets unless accompanied by impact fees or other growth-offset mechanisms. Senators proposed alternatives including down-payment assistance and broader first-time buyer programs instead of age-based exemptions.
The Senate adopted the Finance Committee's report on the bill and several amendments on the floor; Amendment No. 3 was published and debated but was carried over for further consideration. Members agreed to a continuation of floor consideration at the next meeting.
What happens next: The Senate adopted the committee report and several first-stage amendments; sponsors said they will provide additional fiscal analysis and consider tweaks to the residency and age thresholds before final votes resume. The chamber adjourned with the item pending further action.
