A higher
tobacco tax wouldn't send South Carolina smokers scurrying
across state lines to buy cheaper cigarettes. And by all
rights, that finding should clear the way for a needed
increase in the state tobacco tax to help finance rising
Medicaid costs.
But it probably won't. We suspect that fear of losing
tobacco sales to North Carolina was only a smokescreen used by
opponents of hiking the tobacco tax, and they are likely to
find another handy excuse.
Meanwhile, a broad-based coalition of South Carolinians
continues to champion a plan to raise the state's tobacco tax
to help pay for Medicaid programs. The tax on a pack of
cigarettes in South Carolina now is 7 cents, among the lowest
in the nation. Proponents of a tax increase have called for
raising it to 53 cents a pack, still less than the national
average of 79.2 cents a pack.
Opponents have contended, among other things, that raising
the tobacco tax would cause customers to flee to North
Carolina, where the tax is a nickel a pack, in search of
cheaper cigarettes. But a recent study by the American Cancer
Society belies that claim.
A higher tobacco tax in Georgia did not result in a mass
exodus by smokers to South Carolina for cigarettes. Last
summer, Georgia raised its tax on cigarettes from 12 cents to
37 cents a pack. But figures show that Georgia tobacco tax
collections have more than doubled to $227 million during the
2004 fiscal year from $111 million in 2003.
Meanwhile, South Carolina's tobacco tax collections have
declined during the past three years, indicating that the
state received no bump in cigarette sales to
border-crossers.
Research indicates that hard-core smokers will continue to
buy cigarettes at almost any price. And that would result in
an increase in state revenues if the tobacco tax were
increased in South Carolina.
But a likely side benefit of increasing the tax would be a
decrease in the number of smokers overall, especially among
young people with less disposable income and low-income
smokers, many of whom are served by Medicaid. In other words,
increasing the tobacco tax would be a winner all the way
around.
So, what pretext will opponents use now? Some, including
House Speaker David Wilkins, R-Green-ville, say they want to
see extensive Medicaid reforms before advocating a tax
increase.
That looks to us like another smokescreen. Failure to pay
the state's share of Medicaid funding means South Carolina
will lose federal matching funds, which contribute $2.25 for
every dollar the state puts in the kitty. Furthermore, if the
state fails to fund Medicaid, the rest of us will end up
paying for medical care for the indigent through higher
hospital, pharmacy and insurance bills.
It's time to put aside excuses and raise the tobacco
tax.
| IN SUMMARY |
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Raising tax wouldn't send smokers to North Carolina
in search of cheap cigarettes.
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