Posted on Fri, May. 23, 2003


Cigarette tax plan collapses
Senate budget slashes education and health care spending

Staff Writer

Senators got disgusted with one another, threw up their hands and went home Thursday night, closing the books on a state budget that would lower education spending to historic levels, eliminate the SilverCard drug program and cut health care for 43,000 children.

Senators were close to agreement on a cigarette tax increase to raise $170 million for Medicaid, the health care program for the poor and elderly. But negotiations broke down abruptly and angrily, and senators left 10 minutes later.

The fight was over Gov. Mark Sanford's requirement that raising the cigarette tax be accompanied by lowering the income tax. Sanford had lobbied hard for his plan through the week, visiting the Senate antechamber a half-dozen times and visiting senators in their Gressette Building offices.

But he left Thursday afternoon on a plane to Bermuda to attend the conclusion of a Charleston-to-Bermuda yacht race.

Democrats said they could not accept lowering the income tax by the amount Sanford wanted, and were unsure whether he would accept a lesser amount.

Democrats like the idea of lowering the income tax, but worry about taking too much tax money out of programs for schools and other government needs, said Sen. Tommy Moore, D-Aiken.

"If I were going to give some constructive criticism, it's that I wish the governor was here to help us work this out," Moore said.

Overall, he said the breakdown was disheartening. "We talk about Medicaid and all the recipients and all the providers. It's not dead yet, but it's in critical condition."

Senate Majority Leader Hugh Leatherman, R-Florence, said Moore's argument was hogwash.

The governor notwithstanding, Democrats had been resisting compromise for weeks and continued to, at the expense of the poor and the sick, he said.

"We're at an absolute impasse," Leatherman said. "There's no point in staying here if we're not going to be able to meet the needs of Medicaid."

The bottom line? The Senate had agreed Wednesday to spend three days trying to reach a compromise on raising taxes. They gave up after one. Leatherman said perhaps the Senate can reconsider raising the cigarette tax next week, but it would have to be in legislation other than the budget.

This leaves health care in an unprecedented bind, said Robert Kerr, the director of Health and Human Services, the Medicaid agency. Without the $170 million a cigarette tax would have raised for Medicaid, the state will miss out on $400 million in federal matching funds - money used to pay doctors, nursing homes and other providers.

But most important, Kerr said, the agency will have to cut entire programs. That means not paying for: SilverCard, which helps 66,000 seniors buy prescription drugs; CHIPS, which provides health insurance for 43,000 children; 6,000 nursing home beds; and prescription drug benefits for many Medicaid recipients.

"We just hate to see people lose health care who need it most," Kerr said. "They're the ones who can least afford it, and they have no one to speak for them." The legislative day was filled with impassioned speeches.

Leatherman said the "blood of the poor and the weak will be on the hands" of those who did not fund Medicaid. Sen. Verne Smith, R-Greenville, implored people to "care about the raggedy children and those frail old people in the nursing homes."

But the day was also filled with frustration and raised voices - characteristic of the three weeks of budget deliberations. Smith chastised another senator for talking during his speech. Each side accused the other of being obstructionist.

Sen. John Kuhn, R-Charleston, skipped his 5-year-old daughter's graduation ceremony to work on the budget, but said he did not appreciate jokes from senators urging him to leave. His colleagues had teased him because Kuhn often takes the floor to speak.

"It's not fun to make a telephone call to tell her why I can't be there," Kuhn said. "It's really not fun to have you all pour salt in those wounds."

The one area of consensus was grumbling about Sanford. Republicans muttered their disapproval, but Democrats voiced theirs more loudly.

"We're here working; people are missing their daughter's graduation," Ford said, "And the governor put on a pair of short pants and a white T-shirt and took off to Bermuda? Nah. You can't do that."

Sanford spokesman Will Folks said, "I think it's more than a little disingenuous for someone to blame the governor for their own inability to compromise."

Next week brings more budget wrangling. The House and Senate will appoint a joint committee to work out differences in their respective budgets. That conference committee could start work as early as Wednesday, Leatherman said. Ideally, he said, the budget should be done by June 5, the last day of the legislative session.

However, legislators are warning a two-week extended session is a strong possibility as it normally takes more than a week for the House and Senate to work out its budget differences.





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