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Story last updated at 6:59 a.m. Friday, May 16, 2003

Senate says no to Sanford tax cut plan
Associated Press

COLUMBIA--Gov. Mark Sanford's push to reduce the state income tax failed a key test in the Senate Thursday night.

The Senate voted down the tax cut, which was tied to a 53-cent-a-pack increase in cigarette taxes, 27-18.

The higher cigarette tax would have generated about $171 million needed for the state Medicaid programs for the poor, disabled and elderly. The tax reduction would have moved income tax rates from 7 percent to 5 percent during the next few years, depending on how fast income tax collections grew as the economy recovers.

The cigarette tax increase was a key element in a $5.1 billion budget. Without it, and with a variety of smaller tax increases, fees and raids on accounts, the Senate's total budget is now more than $381 million less than when it hit the floor on May 6.

Sanford's plan failed after an hour-long debate. Sen. Verne Smith, R-Greer, told the Senate there was no other clear way of rescuing Medicaid programs from cuts.

But Sen. Jake Knotts, R-West Columbia, said the Senate should send a message to "let them know we're not going to throw good money at a bad situation."

Sanford's tax plan could re-emerge next week as the Senate continues the longest budget debate in years.

Hours of closed-door meetings led Democrats and Republicans to agree to a second reading of the state spending plan although they had barely debated the details.

For instance, Sen. Scott Richardson, R-Hilton Head Island, made another attempt at raising the cigarette tax and the sales tax, but that plan fell victim to Senate rules. That's the same fate that befell other attempts this week.

"The mood in the Senate is not for a tax increase," Senate Finance Committee Chairman Hugh Leatherman, R-Florence, said.

Nonetheless, Sen. Tommy Moore, D-Clearwater, said he'd try to rally support again for a plan that raises the sales tax to 7 percent from 5 percent.








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