Posted on Tue, Nov. 11, 2003


Tobacco tax supporters prepare for third bout in Legislature


Associated Press

A coalition of groups that want to increase tobacco taxes to pay for state Medicaid programs says it's ready for a third bout with the Legislature.

This time the Cigarette Tax For Health Care Coalition is rallying behind a cigarette-smoking piggy bank logo on bumper stickers. But the message is the same: Raise the cigarette tax to provide a long-term, reliable way of paying for health care programs for the aged, disabled and poor.

The coalition includes hospitals, health and disability groups and the South Carolina Chamber of Commerce.

The cigarette tax has failed in the past two legislative sessions in the face of pledges of no tax increases and leaders who insist Medicaid reform in the Republican-controlled General Assembly.

The outcome will be different this year, said Sue Berkowitz, executive director of the South Carolina Appleseed Legal Justice Center. "I do think the votes will be there," she said.

There is more pressure this year for raising cigarette taxes, Berkowitz said. The state was able to head off deep cuts in Medicaid programs this year with the help of one-time federal money, raiding reserves and by squeezing spending in other state agencies. Those options aren't available in the coming year, Berkowitz said.

Last year, the coalition pushed an increase of 53 cents a pack on top of the current tax of seven cents, the nation's fourth-lowest cigarette tax. Berkowitz says now that 63 cents is the minimum increase that should be considered. That would raise nearly $200 million, based on state Board of Economic Advisors projections.

Republican Gov. Mark Sanford wants the cigarette tax raised to a total of 68 cents and would combine that with a sales tax on lottery tickets, generating $222 million. However, Sanford would use the extra money to reduce the state's income tax.

Berkowitz worries that plan won't guarantee money for Medicaid. Sanford spokesman Will Folks says the governor's budget will fully fund Medicaid programs, but he would not discuss details of the plan.

Key lawmakers are still saying no to a tax increase.

"We need Medicaid reform before we begin increasing taxes," House Speaker David Wilkins, R-Greenville, said. Wilkins worked against the tax increase last year. "We need to get a handle on this ever-increasing Medicaid budget that we have."

The House passed a Medicaid restructuring bill last year that's now before a Senate committee. Senate President Pro Tem Glenn McConnell, R-Charleston, expects to see that measure come up for debate.

The cigarette tax coalition says it will do more this year to emphasize the fairness of a higher tax on cigarettes because smoking-related illnesses tax everyone. "This hidden tax will continue to increase without decisive action" in the Legislature, said John Lumpkin, a board member of the State Chamber of Commerce.

Arguments like that "are just not very persuasive to me," McConnell said. "We've got another crowd who says those who eat high-cholesterol foods cost people money."

The debate comes down to "crunching numbers and choosing new ideas" to "fix the Medicaid problem, but also contain its cost," McConnell said.





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