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The smoke rises

Debate intensifies on issue of increasing cigarette tax

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South Carolina is the heart of tobacco country, a place where the golden leaf is symbolic of the culture, tradition and economics of the state.

So when there's talk of raising the taxes on cigarettes, the debate is bound to get heated.

For years health advocates and various lawmakers have pushed for a tax increase on cigarettes. To date, all efforts have fallen short.

But as each year goes by, the issue gathers more support. This year, though the governor and some legislators are in favor of raising the rate, other legislators don't think it's a front-burner issue.

However, advocates for such an increase were galvanized by a new poll released Thursday that reveals significant statewide support for raising the cigarette tax, a finding that they hope might drum up support to prompt legislators to do so for the first time in nearly 30 years.

South Carolina ranks last in the country in cigarette taxes at 7 cents per pack, a dime less than the second-lowest state, Missouri, which has a 17-cent tax.

The state spends about $1 billion a year on cigarette-related health-care spending, and supporters say a 93-cent cigarette tax increase would generate an additional $223 million to help offset those costs.

But opponents say there's no need. Raising taxes in an election year doesn't typically go over well with voters, and the state budget already has a surplus, they say.

Tobacco is the state's No. 5 crop. It generated $115 million in sales in 2004, according to the U.S. Department of Agriculture.

State Rep. Jim Battle, D-Nichols, a former tobacco farmer, has said he thinks keeping the tax low is good for the economy by collecting more tax funds through higher cigarette sales volume.

"A few years ago, you'd find a lot of opposition (to raising the tax)," said Rep. Thomas Rhoad, D-Branchville, "But (tobacco) backers are just about gone. It's just not a big issue anymore."

The issue could come to the table next month, when legislators shift their attention from property taxes to the state budget.

The proposal to hike the cigarette tax has sparked support from health advocates who think steeper prices will force adults to cut back and discourage kids from getting hooked, as well as backlash from cigarette companies and tobacco retailers who have an economic interest in keeping prices down.

But many say the roots of the issue are deeper.

POLITICS AT WORK

Myriad reasons are cited for the state's inability and unwillingness to raise the cigarette tax, which hasn't been increased since June 1977, when the tax went from 6 to 7 cents per pack.

Gov. Mark Sanford, an advocate of a higher cigarette tax, said the reason it hasn't been raised for nearly 30 years is likely due to tobacco company lobbyists' influence on the General Assembly. Prior to 2003, when sweeping campaign finance and disclosure reforms were passed and signed into law, donations to state lawmakers largely went unreported.

"The bottom line is, we'll never know what kind of money was given to caucuses -- both Democratic and Republican -- before those (campaign donations from lobbyists) were required to be disclosed," Sanford said. "I suspect (tobacco companies) had a significant influence on the actions in the legislative process."

Sanford said he's generally opposed to raising taxes, but a cigarette-tax increase could be offset by a tax decrease elsewhere, like property or income tax.

A history of close ties between state lawmakers and tobacco companies complicate the issue, said Lisa Turner, manager of public policy for the South Atlantic Division of the American Cancer Society in Columbia.

"I think it's just historical relationships in the area," Turner said. "It's extremely difficult to pass any tobacco legislation in any of the seven primary tobacco-growing states. Going up against the tobacco industry is serious, serious work."

Because the industry spends nearly $300 million each year marketing its products to South Carolina, Turner said it's difficult to fight a battle with little or no funding in state prevention programs.

"When we go to the Statehouse, it's one or two of us against a whole slew of tobacco lobbyists and their partners," Turner said. "You can see that this is a classic David versus Goliath with us going against big tobacco."

A number of bills to raise the cigarette tax have been introduced in the state legislature over the past three years, including one last year. But so far, each proposal has stalled in committee.

And because it's an election year in which all 124 seats in the House of Representatives are up for vote, it would be difficult to pass a tax increase through the traditionally tax-averse Republican-dominated legislature.

A FIGHTING CHANCE?

Advocates for increasing cigarette taxes keep fighting, and Turner and others are beginning to have hope.

In a presentation to the Statehouse on Thursday, the South Carolina Tobacco Collaborative released results from a January poll of 500 South Carolina voters that revealed that 71 percent say they would support a 93-cent cigarette-tax hike.

The collaborative is a coalition of more than 30 member groups, including the American Cancer Society, American Heart Association, American Lung Association of South Carolina, and the state Department of Health and Environmental Control.

The survey, conducted for the collaborative by Public Opinion Strategies, a conservative political and public-affairs research firm, said the proposal had broad support from both Democrats and Republicans. They would support a "significant increase in the cigarette tax to reduce youth smoking and fund important health programs."

The survey also found 51 percent of the voters said they would be more likely to support a candidate in favor of a cigarette-tax increase, while 31 percent said it made no difference.

Turner said the poll results could help persuade legislators to rethink their opposition.

"What we need is a really strong, powerful advocate in a key position to advocate change, and we've lacked that," Turner said.

In other states that recently have upped cigarette taxes, Turner said, "There was at least one very strong player who had the political capital and was willing to spend it."

Though South Carolina has lacked that kind of leadership so far, Turner said, "people are finally starting to see the light where tobacco is concerned."

She said each pack of cigarettes consumed costs the state $6.52 in related health-care and productivity costs. That's $6.45 less than the state gets on the sale of a pack by way of taxes.

Any boost in the state's cigarette tax needs to be significant, Turner said.

"We're not going to get another swing at this," she said, "so we need to get a big chunk now while we can."

TIMING PROBLEM

House Speaker Bobby Harrell, R-Charleston, said recent cigarette-tax hikes in neighboring states North Carolina and Georgia probably will build momentum among House members to consider raising the tax. But so far, there hasn't been much opportunity to discuss it.

North Carolina raised its per-pack tax from 5 cents to 30 cents last year and will increase it to 35 cents this summer.

Georgia's cigarette tax is 37 cents a pack.

And last year, Kentucky, which had the nation's lowest cigarette tax at 3 cents a pack, increased its tax to 30 cents a pack.

Harrell, who previously opposed raising cigarette taxes, said once the House turns its attention to the state budget, he expects the cigarette tax to get discussion. But he's unsure if the measure would have enough support to pass this year.

"It's not a simple issue for me," Harrell said. "Raising taxes is the power that the General Assembly has to use very carefully. The only reason I'm even considering (raising taxes) is if it decreases the likelihood that children will start smoking. That's the only merit to this situation that requires our attention.

"The bottom line is, most of our taxes are the lowest in the country -- our gas tax, our income tax on seniors ... . We're a state that's generally hesitant to tax people."

Local lawmakers say they're in favor of raising the cigarette tax, but they hedged on whether the legislature would be able to get anything done this year.

Sen. Scott Richardson, R-Hilton Head Island, said he's in favor of a hike, but he's not optimistic anything will be passed this year.

"Tax bills in election years are particularly tough on House members, and we're so intent on getting property tax issues resolved that people are hesitant to tackle another tax bill," he said.

Rep. Bill Herbkersman, R-Bluffton, said many House members are wary of raising taxes in an election year. If they're unwilling to raise the tax significantly, lawmakers should hold off until the bill has more momentum.

"We're only going to get one bite out of that apple," he said. "Because of that, (the tax increase) has to be a major one."

Herbkersman, a long-time supporter of raising cigarette taxes, said the money derived shouldn't be used to balance the state's budget, but rather on cessation and prevention programs and on Medicaid.

"I think it just makes sense that if it's costing us Medicaid dollars, why shouldn't we increase it?" Herbkersman asked. "It seems like the logical thing to do."

But sometimes, politics can get in the way of logic.

"I think the appetite is growing," Herbkersman said, "but I don't know if we're going to see a positive movement in that direction this year."

In order for a new tax to be levied, taxes need to be cut somewhere else, said Rep. Richard Chalk, R-Hilton Head.

"To me, that's the only way I see it happening, given the current General Assembly," he said.

On the possibility of the tax being raised this year, Chalk said: "The short answer is no. There are too many people that have signed the no-tax pledge, and I don't see them willing to break that pledge."

But some say there's more at stake than political capital and tax dollars.

"We know from strong evidence that we'll see a decrease in the youth smoking rate, a decrease in health-care costs associated with smoking, and revenue we'd like to see go towards prevention and education programs," said Renee Martin, executive director of the tobacco partnership.

"There is no downside to this tax," Martin said. "It's the most effective thing the legislature can do in this year's General Assembly."

Contact Peter Frost at 706-8169 or . To comment on this story, please go to islandpacket.com.

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