Senate approves 50-cent cigarette tax increase

Associated Press Writer

COLUMBIA, SC (AP) - South Carolina senators on Wednesday approved raising the nation's lowest cigarette tax by 50 cents a pack.

South Carolina's current cigarette tax of 7 cents a pack hasn't increased since 1977, when a pack cost 49 cents.

By a 32-12 vote, the Senate on Wednesday gave final approval to raising the tax to generate about $130 million for Medicaid programs. They'll set aside $5 million each for cancer research at the Medical University of South Carolina and programs to reduce smoking.

The Senate legislation would put the Medicaid share of the money into a trust fund and will be used in the 2012 budget year to head off deep spending cuts in health care programs for the state's elderly, disabled and poor after temporary federal help for those programs disappears.

When the cigarette tax cash is matched by federal money, it will generate about $500 million, said Senate Finance Committee Chairman Hugh Leatherman, R-Florence.

That "will plug holes — not to start new programs; not to expand programs — simply try to provide what we're doing now," Leatherman said.

State Sen. Kevin Bryant, a Republican pharmacist from Anderson, argued the money should be used on a tax decrease elsewhere and not on money-losing government health care programs.

"If we don't reform the system, we're going to continue to pour money down this drain and we're never fully going to have a good Medicaid system in this state until we reform the system," Bright said.

The bill now is bound for the House, which can go along with the Senate's plan or amend the bill and send it back to the Senate. House budget writers approved a cigarette tax increase of 30 cents a pack last month. But Senate rules won't allow that tax increase to be included in the spending plan they'll take up in a couple of weeks.

Legislators expect the bill will end up in a conference committee for differences to be worked out.

Republican Gov. Mark Sanford has promised to veto a cigarette tax increase if the money isn't used to reduce taxes in other areas.

Senators Wednesday scrambling to make it more likely the tax increase would survive a veto threat. They stripped out plans to use part of the tax increase to pay for agriculture product marketing and rural projects. Instead those initiatives would be paid for with money from the state's settlement with tobacco companies.

"The whole thing is an effort to get the votes needed to override a veto," said Senate Minority Leader John Land. The Manning Democrat two weeks ago rallied votes for those initiatives when the bill won second reading with a 26-16 vote.

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