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Light
up ... pay more?
Lawmakers
offer views on proposal to raise cigarette tax
January
25, 2007
By MIKE
ROSIER
Index-Journal
staff writer
It’s
a battle that’s sure to fire up again.
Gov. Mark Sanford
has proposed a substantial lift — 37 cents a pack — for the
nation’s lowest state tax on cigarettes. South Carolina’s
present tax is 7 cents per pack. The national average is about
a dollar.
According to statistics at
www.tobaccofreekids.com, the city of Chicago alone has a
higher tax on cigarettes than does South Carolina — and by a
wide margin — as do Anchorage, Alaska and New York
City.
Missouri ranks just ahead of South Carolina, but even
its state tax per pack is 10 cents higher at 17
cents.
During his recent State of the State address,
Sanford said a tax hike on cigarettes would help South
Carolinians.
“We believe part of our state’s ability to
compete lies in our competitiveness in different tax
categories,” Sanford said. “We believe ... trading off an
increase in cigarette tax for a decrease in income taxes would
be incredibly timely.”
There are two primary reasons most
offered for South Carolina moving on the cigarette tax issue
sooner, rather than later: increased smuggling and soaring
healthcare costs.
Having the lowest cigarette tax in the
nation makes the Palmetto State a prime candidate for those
individuals who profit from the smuggling of cigarettes.
A
smuggler purchasing cigarettes in South Carolina can turn a
healthy profit most anywhere else in the country. Then there
are the innate “taxes” that the act of smoking itself has
imposed on the state’s overall health in the form of
smoking-related deaths and rising healthcare costs.
But
simply raising the tax on cigarettes is not what troubles the
majority of Lakelands lawmakers.
Many — both Republican and
Democrat alike — agree the time has indeed come to move on
this issue.
It’s what is to be done with the money drawn in
by a cigarette tax increase that has legislators bracing for a
fight. Sanford’s plan calls for the new funds to be used to
cut income taxes for South Carolinians.
“We believe in
making South Carolina as competitive as possible,” said
Sanford spokesman Joel Sawyer. “The cigarette tax we have is
the lowest in the nation. We think it makes sense that if you
believe in overall tax neutrality ... to trade off that
increase with a decrease.
“Many people feel as the governor
does, that South Carolinians already have a large enough tax
burden as it is. We look at (the proposal) as a bridge between
those that would like to see a higher cigarette tax and those
that would like to see overall tax relief.
“Of course, we
would always prefer a straight tax cut, but with this (plan)
we are looking to build a bridge between those people that
want to see the cigarette tax raised as well as those that
want to see tax relief.”
What did local senators and
representatives have to say? Following are comments from local
lawmakers:
- Rep. Paul Agnew (D) — “Last year, and this
year, I introduced bills to increase the tax to 39 cents,
which is approximately the Southeast average. I feel strongly
on this issue, and feel that we should use the money to fund
additional healthcare programs. The bill I have proposed, H
3152, would use the Medicaid draw down (matching federal
funds) to fund additional healthcare for children.
“It also
has a component that would assist small businesses in
providing better coverage for their employees. The national
average for cigarettes is over a dollar now. I think it’s long
overdue that we raise the cigarette tax. We need to decide as
a state whether or not we want quality healthcare for our
citizens or cheap cigarettes.
“Hopefully, an increase will
also discourage people — and particularly our youth — from
picking up this habit. I’ve also read where South Carolina is
becoming a haven for (cigarette) smugglers. A tax increase
would help to address those serious concerns as well. There
are all kinds of compelling reasons to (raise the cigarette
tax).
“The governor has proposed (with his cigarette tax
plan) that we include an offsetting income tax reduction. I
believe that plan is flawed. First, you’re putting more on the
backs of poorer individuals and giving the wealthiest citizens
a tax break at their expense. I think South Carolinians have a
greater desire to provide healthcare for our
citizens.
“Smoking causes health problems, not income
problems. I applaud the governor for wanting to increase the
tax, but I disagree that the funds should be used in an income
tax reduction. Seventy-one percent of South Carolinians would
support an increase of even a dollar — if the money is used
for healthcare.”
- Rep. Michael W. “Mike” Gambrell (R) —
“I’m not opposed to raising the cigarette tax and bringing it
more in line with where it should be. The thing I like is that
it would affect our young people with the pure economics of
it, and keep young people from even picking up the habit. I
would like to see (revenue increases) used to help fund child
care and Medicaid expenses, or some kind of healthcare
initiative.
“In my district ... I don’t think I’ve ever
heard anyone complaining about their high, high state income
taxes. Property taxes maybe, but not income taxes.”
- Sen.
John W. Drummond (D) — “I would support (a higher tax on
cigarettes). As you know, we have the lowest cigarette tax in
the nation. I would vote for it, but only as long as it’s used
for education or healthcare. That’s the only way that I’ll
vote for it.”
- Lewis E. “Gene” Pinson (R) — “A small
increase around 37 cents or 40 cents would probably be
appropriate. Really, I don’t have any trouble with a cigarette
tax as being balanced with a reduction in other areas. The
governor wants to decrease personal income taxes, but I just
don’t think that gives us the best bang for the buck.
“If
we put (the increased revenue) into Medicaid, those funds are
matched by the (federal government) three-to-one. If we
present a dollar, we get three back. We’re going to have to
look at a lot of factors. The data out there supports that
smoking is a killer, but my personal preference is to tie it
into healthcare.”
- J. Anne Parks (D) — “I would support a
(higher) cigarette tax, but for me to support a cigarette tax
I would like to see the benefits go to healthcare or Medicaid
as cigarettes are one of the leading problems as far as from
the health problems that it contributes to. And if it goes to
Medicaid then we would get the three-to-one federal
match.”
- Sen. Tommy Moore (D) — “I have been and will
continue to be supportive of an increase in the state’s
cigarette tax.
South Carolina’s is the absolute lowest in
the nation. There have been a lot of articles written about
bootlegging problems and that’s certainly one major factor.
The other is that everyone — even the most ardent opponent —
must recognize the toll that smoking takes on the public
health and the fact that the Medicaid budget has increased
considerably.
“We have to look at the national and state
averages and certainly there is room for discussion there. The
governor’s proposal of tying in a cigarette tax to income tax
relief serves as basically a net decrease in revenue and does
not do anything to address the massive healthcare needs in
South Carolina.
“They should be separate issues. I just
don’t see where they are linked. It’s ludicrous that we don’t
capitalize on (matching federal funds for Medicaid) and
utilize that. It’s a disservice to South Carolinians that we
don’t take advantage of that.”
Sen. William H. O’Dell (R),
Rep. Marion B. Frye (R) and Rep. Michael A. Pitts (R) could
not be reached for comment on this story.
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