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.