Of two proposals to raise the state cigarette tax now being considered in the
S.C. House, the proposal to link the tax to improved Medicaid benefits is
clearly superior. It would increase benefits for thousands of low-income South
Carolinians, including 40,000 children, and would capture some $300 million in
federal money to do so.
That proposal, approved in a House subcommittee on Thursday, would raise
cigarette taxes by 32 cents. Advocates also insist that the tax would help
discourage the use of tobacco by young people.
That claim was disputed by tobacco industry lobbyist Fred Allen, in comments
quoted by The Associated Press. "If you want to stop people from smoking, it
takes a much, much larger tax increase," Mr. Allen said.
That should be something for the Legislature to consider, in view of the
general difficulties of funding the rising cost of Medicaid. Legislators briefly
considered a tax hike of 53 cents per pack in 2003 to raise $170 million for
Medicaid and to provide an income tax cut.
The second proposal would raise the cigarette tax by 30 cents to create a
"trust fund" that legislators would decide how to spend, according to the AP. It
also would reduce income taxes by a corresponding amount.
Using revenues from an increased cigarette tax for health care is a logical
link, in view of the proven health risks of smoking. As Rep. Chip Limehouse,
R-Charleston, says, "Cigarettes should have to pay some of the health care costs
associated with their usage."
The S.C. Medical Association estimates that tobacco-related illnesses cost
South Carolina more than $850 million a year.
By a close vote, the House rejected cigarette tax hikes last month during its
budget deliberations. The separate bills give legislators a chance to reconsider
a missed opportunity.
South Carolina has the lowest cigarette tax in the nation, at 7 cents a pack.
Using the $112 million that a 32-cent pack increase would generate for Medicaid
would enable the state to gain about three times that figure in federal money to
support health care for low-income residents, many of whom are children.
A relatively poor state like South Carolina can't afford to pass it up.
