Wilkins says cigarette tax increase unlikely

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"In the end, I do not believe the South Carolina House will increase taxes," said Wilkins, R-Greenville.

But House Democrats and healthcare advocates said the Republican plan continues to fund the essential, recurring services with too much one-time money, in addition to increasing taxes on the state's public hospitals and taking money from public schools.

House Democratic Leader James Smith, D-Columbia said he and other legislators intend to continue to push for the cigarette tax increase as a reliable, continuing funding source for Medicaid.

And Rep. Joel Lourie, D-Columbia, said that if the cigarette tax is not adopted, "we'll be right back where we are now next year. This is a terrible solution."Sue Berkowitz, representing the Cigarette Tax for Health Care Coalition, said refinancing the tobacco settlement to generate $45 million for Medicaid amounted to little more than a one-year band aid for the program.

The coalition plans a rally in support of the tax increase at the Statehouse at noon today."While we are glad the leadership recognizes that healthcare funding is a top priority, continuing to fund recurring needs with non-recurring money - and this proposal continues the practice - is what got us into this mess in the first place," Berkowitz said.

"Under this proposal, Medicaid would be funded with $10 million in unspecified eligibility changes, at least $45 million in one-time money, a $20 million tax increase on hospitals and by taking $20 million out of an under funded Department of Education," Berkowitz said.

The House Republicans would restructure the South Carolina tobacco settlement fund to take advantage of changed bond market conditions, Wilkins said.

"We have an opportunity to restructure our tobacco bonds so that South Carolina's Medicaid program can take advantage of a substantial, on-going source of revenue," Ways and Means Committee Chairman Bobby Harrell said.

Harrell said refinancing the tobacco bonds would free up $45 million next year, with $36 million available each year after that. Growth in inflation would boost the revenue stream by several million dollars over the next 16 years, Harrell said.

"One of the most attractive parts of the plan is that it makes substantial progress in nearly eliminating the dependence of South Carolina's program on one-time or non-recurring revenues," Harrell said.

But Harrell acknowledged that the Republican plan includes $45 million in non-recurring funds. Rep. Robert Brown, D-Hollywood, said he could not support the Republican plan because it fails to fix the very problem that Republicans have criticized for years.

"I was under the impression that using one-time money for recurring needs was a problem that the Republicans intended to stop. Here we are doing it again. I'm totally against that," Brown said.

House Majority Leader Rick Quinn, R-Columbia, said that under the Republican plan, eligibility would not change and no services would be cut. But Democratic Leader Smith cited the Department of Health and Human Services estimates that new eligibility rules would make about 6,700 families ineligible for Medicaid who are currently eligible.

"We as elected leaders of this state should not balance the budget shortfall on the backs of those lest able to afford it," Smith said.