While many legislators feel the tax should be increased, they disagree on just how much the tax should be raised and just where the revenue raised from that tax should be allocated.
Legislators discussed the issue during a panel discussion last week.
“We’ve come close in the past … about doing something about our cigarette tax,” said Sen. Harry Ott, D-Calhoun, Lexington and Orangeburg. “The general public is way ahead of the General Assembly, in the fact that they will support a cigarette tax.”
Ott believes the state should take money raised by the tax and place in a program that pairs with it matching federal dollars.
Doing so would allow the legislature to raise revenue without relying solely on tax cuts, he said.
“We can take care of some of those costs we are seeing in the health care field, and we can do that with a cigarette tax,” Ott said. “I believe we have an obligation … to make sure our constituents have access to health care that’s affordable and accessible.”
The state’s 7-cent tax has not been increased since 1977, and remains the lowest in the country, according to
Sen. Thomas Alexander.
Alexander chairs the Senate Finance, Health and Human Services sub-committee, and supports a 50-cent per pack increase.
Had a cigarette tax passed earlier, the state’s financial outlook might not be so bleak, Alexander said.
“Roughly, at that time, it would have generated $160 million,” he said.
Rep. Kenny Bingham, R-Lexington, said the issue isn’t raising the tax, but how to direct the money generated by it.
Funding Medicaid with the cigarette tax presents a problem, as the tax, intended to stop young people from taking up smoking, will be a declining revenue source, he said.
“If we use a declining source of revenue to expand … one of our fast-growing line items in our budget … it’s a bigger hole that’s got to be filled out of something,” Bingham said. “It’s got to be filled out of the general fund.”
Sen. Hugh Leatherman, R-Darlington and Florence, said he would support a cigarette tax, providing all money raised from it goes to health care, but would not support raising the tax if the money was used to offset another tax.
Rep. Dan Cooper, R-Anderson, agreed.
“I don’t want to fund programs that are going to have to be funded by something else,” he said.
Using cigarette tax funds on programs that are already funded, or endanger of losing funding due to cuts, is a good use of the money, but the tax funds should not be used to expand programs, Cooper said.
Cooper said raising the tax could endanger businesses along the borders whose customers may flock to North Carolina and Georgia for cheaper smokes.
“We’ve got roughly 20 counties that border those two states,” he said. “If we create a 20-cent a pack increase above those states, we’re going to affect businesses along those border counties. I’d like to see us not get above those two states.”
North Carolina and Georgia have already raised their cigarette tax above South Carolina’s, Alexander said.
Those without health care coverage are already costing taxpayers money by relying on emergency room treatment for their illnesses, he said.
“We’re trying to minimize the cost and allow more people to participate in the system,” Alexander said. “We’re trying to prevent people from smoking.”
Rep. Gilda Cobb-Hunter, D-Orangeburg, said she could support a 50-cent tax.
“If we’re going to raise the cigarette tax, we ought to make it worthwhile,” she said. “It ought to all go to health care, to create coverage for people who are sick. It is a shame in the country that we have people going out without coverage.”
Rep. Brian White has pre-filed a bill that would raise the tax 25 cents per pack, with no federal match.
“I don’t think we need to be relying on the federal government to help us keep Medicaid propped up,” he said.
Money raised, under White’s bill, would be placed into a reserve account, to be available for Medicaid during economic hardship.
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