Alexander: Only God’s grace may result in cigarette tax hike

South Carolina’s cigarette tax would increase by 50-cents per pack under a plan legislators approved Thursday although the measure almost certainly will be vetoed by Gov. Mark Sanford.

With a 16-5 vote, the Senate Finance Committee, chaired by Walhalla Republican Thomas Alexander, agreed to raise the nation’s lowest per pack tax from 7 cents to 57 cents a pack. That action came after legislators stopped arguing about how to spend the $145 million the tax would raise. They decided instead to impose the tax in July, create a trust fund for the money and put off spending decisions until next year.

“We would absolutely veto any tax increase without a corresponding tax decrease,” Sanford spokesman Joel Sawyer said after the vote.

However, Alexander said it could very well require divine intervention for the legislation to even make it to the governor in the remaining two weeks of an abbreviated legislative session. The General Assembly has decided to go home early in an effort to save money.

A clearly frustrated Alexander said Thursday that getting the bill out of his committee was a “huge step in the right direction.” However, he said he has no idea what will happen on the Senate floor.

Committee debate on the bill sent over from the House stalled Tuesday with Democrats threatening to block it because it called for using $100 million to create a new health insurance system for the state’s low-income workers. Democrats said it made no sense to create a new bureaucracy and cover overhead costs at insurance companies to support a new program when the money instead could go directly into expanding existing Medicaid programs that cost less to run.

Alexander said most legislators have gotten past the question of whether cigarette taxes should be higher, and that he personally supports an increase to dissuade young people from taking up the habit and help fund the medical needs of the uninsured. He said spending decisions were standing in the way of the bill.

“This is one of the most complicated and difficult things I’ve dealt with since I’ve been down here,” the 20-year veteran said. “I think what this shows is that the tobacco interests are alive and well in South Carolina.”

While Alexander said he remains convinced that it will require a public-private partnership to address all the needs of the uninsured, he said establishment of the trust fund gives the assembly additional time to work our differences on how the money is spent. He said it would also allow the state to respond should the federal government require state participation in a federal plan for the uninsured.

Over in the House, Speaker Bobby Harrell said the trust fund was a bad idea and urged the Senate to restore provisions in the House bill that would give the money back through tax credits and private insurance options.

“This (trust fund) sets up the potential for government to just tax and spend the money elsewhere instead of using tax credits to help people purchase the health care coverage they need,” Harrell said.

No matter what version of the bill reaches Sanford’s desk a veto seems inevitable.

Speaking for the governor, Sawyer said “imposing a tax before deciding how to spend the revenue seems like a backward way to implement public policy.”

The Democrats’ minority leader, John Land of Manning, praised the establishment of the trust.

“I think this would be one of the wisest thing that this state has done in a long time,” Land said.

Since details of the federal program aren’t set, “it seems to be a very fair way to handle it right now,” said Department of Health and Human Services Director Emma Forkner.

Upstatetoday.com
by Brett McLaughlin

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