COLUMBIA--Gov. Mark Sanford said Friday he's in favor of raising the state's cigarette tax as long as it's tied to a bill that would reduce the personal income tax rate during the next 15 years.

Sanford said it was important to reveal his plan to fund the state's Medicaid program because the House and Senate are on different paths in their attempts to solve the state's roughly $1 billion shortfall for next year's budget.

Sanford said if the votes were taken today, the Senate would approve a cigarette tax increase and the House would reject it.

The timing also is important because Sanford leaves next weekend for reserve training in Alabama that will last two weeks.

Republican House leaders introduced a plan Wednesday to refinance the state's tobacco settlement bonds to give full funding to Medicaid, a health care program that serves South Carolina's poorest residents.

Those officials said they were encouraged by Sanford's plan to lower income taxes eventually, but they don't want to raise taxes either.

"It's crucial we use the debate on Medicaid funding and the cigarette tax as a way to advance tax changes that will strengthen the economy," Sanford said.

He wants to raise the state's cigarette tax to 53 cents a pack from 7 cents, one of the lowest rates in the nation. The governor said he would support a smaller tax increase, but "if it's a smaller number, then it's going to take longer to get where we want to get."

Sanford said a 53-cent increase would generate about $400 million, which would be matched by federal dollars for the Medicaid program.

He said a cigarette tax increase also would help insurance payers avoid a hidden tax that health care providers have said would be shifted to higher insurance premiums if Medicaid was not funded fully.

Sanford said a tax increase would generate between $200 million and $400 million in federal matching dollars for Medicaid.

The proposal would benefit small businesses and personal income earners, Sanford said, and would help the state become more competitive economically, ultimately creating more jobs.

But College of Charleston economics professor Frank Hefner said he's not sure Sanford's plan to reduce income tax rate from 7 percent to 5 percent over 15 years would work.

"As much as I would like to be a fan of tax cuts, I'm not too sure this is the best time to do it," Hefner said, referring to the state's budget crunch.

House Speaker David Wilkins, R-Greenville, said he remains opposed to a cigarette tax increase but wants to learn more about Sanford's proposal.

"The concern with his plan at this stage is that it proposes a huge tax increase without a guarantee of a tax decrease," Wilkins said. "The House developed a proposal that provides funding of Medicaid without raising taxes and without taking additional revenue out of the general fund that must be used to meet other critical needs."

Sanford applauded the GOP leaders' plan to refinance the tobacco settlement funds and called it creative, but said it's still borrowing from within the state.

Rep. Joel Lourie agreed with the governor but said he would take a wait-and-see approach before endorsing Sanford's plan.

"We think the governor's plan is certainly better than the House leadership plan," said Lourie, D-Columbia, who has sponsored legislation that would increase the cigarette tax. "We certainly appreciate the governor's willingness to open up the dialogue and his understanding of the need to find a long-term solution to Medicaid."

Sanford has said his plan is that long-term solution and takes state of the economy into account.

"We're in an unprecedented time in terms of the budget crisis that is before us," he said. "It really does make everybody in South Carolina a shareholder in the growth of the economy. So, as the economy expands, people get a larger and larger credit back in the form of personal income tax reduction."

But if the economy doesn't expand, it might just be a tax increase.

"If we were flat next year, then there would be no income tax credit because obviously personal income tax revenue had not grown," said Sanford, adding that the situation is unlikely.

Personal income tax collections have increased on average by 6 percent annually, according to statistics from Sanford's office, and about half of that would go each year toward lowering the income tax.