Sanford says tax swap plan is key to economic growth in state

Governor Mark Sanford talks about his new tax incentives for small business during a press conference at ScanSource in Greenville Monday afternoon. Owen Riley Jr./Staff e-mail this story to a friend

Sanford has proposed a more than 50-cents-a-pack hike on cigarettes as a means of providing a stable funding source for federal Medicaid matching funds. It would be paired with a reduction in the maximum state income tax rate to 5 percent from 7 percent, knocking it from the highest in the Southeast.

In Greenville, Sanford said, "Central to the notion of stimulating our economy is actually investing in our economy and locking in a tax plan that slows the future growth of state government. Our plan does both of those things."

Sanford appeared at an Eastside press conference at ScanSource, sandwiched between similar events at small businesses in Columbia and Charleston.

In an interview, he acknowledged the plan faces a "tough fight" in the Legislature where the House has already approved its own Medicaid plan, one that rejected a cigarette tax and could drop 10,000 families from coverage. Neither did the House budget bill make any provision for an income tax cut.

The House's refinancing plan has been called into question by Philip Morris Company's warning in Illinois that it might not be able to make future settlement payments.

Its plan for Medicaid, the program that provides health care for the poor, is built around $70 million in new money and refinancing the state's tobacco settlement bonds to provide additional funds.

To achieve his two-prong goal, Sanford said he is depending on the Senate — where there is more support for the cigarette tax than in the House — enacting the tax package and the House acquiescing.

Sanford, 42, returned Saturday from two weeks of training at Maxwell Air Force Base in Alabama. He received a direct commission as a first lieutenant last year and is assigned to the 315th Aeromedical Evacuation Squadron at Charleston AFB as a medical administration officer.

"No, I wasn't the oldest one there," Sanford joked with reporters. Most of the new officers were in their late 20's, he said, but some doctors and nurses were older, including mid to late 40's.

The process, he said, made him more appreciative "of the sacrifices of these reservists and (National) Guard folks do, much less the active duty folks."

With two weeks devoted mostly to leadership training, Sanford said he would emerge as a better governor because of the transference of leadership skills.

Dan Hoover covers politics and can be reached at 298-4883.