(Columbia-AP) April 3, 2003 - A Senate subcommittee has approved a plan that would increase the seven-cent cigarette tax by 53 cents a pack.

The Senate Finance subcommittee plan also would decrease sales taxes on groceries by a half cent each year. In nine years, the grocery sales tax would be a penny on the dollar.

The plan would raise $150 million to fund Medicaid. Republican Senator Wes Hayes, of Rock Hill, says as much as $450 million could put be aside for Medicaid, once federal matching funds are added.

The full Senate Finance Committee is expected to take up the plan Tuesday.

Subcommittee members rejected House plans to refinance tobacco settlement bonds to pay for Medicaid programs. They also rejected Governor Mark Sanford's proposal to tie an increase in the cigarette tax to a decrease in income taxes.

posted 3:29pm by Chris Rees