Sanford vetoes 50-cent cigarette tax increase

Columbia, SC - COLUMBIA, SC (WMBF) - South Carolina Gov. Mark Sanford has vetoed a bill that would have increased the nation's lowest cigarette tax by 50 cents per pack.

Sanford on Tuesday rejected legislation to raise South Carolina's tax from 7 cents a pack to 57 cents.

The governor says he has supported increasing the cigarette tax for seven years, but only if some other tax was cut. He says his approach is especially important as the state tries to recover from the recession.

"With the state's economy just beginning to emerge from one of the worst recessions in modern history, we're holding to that principle more firmly than ever," he said. "In these difficult economic times, we believe it would be sheer folly to impose the largest tax increase since 1985.

"Indeed, the reason we're facing these budget problems in the first place isn't because South Carolinians are taxed too little; it's largely because government spends too much. After growing state government spending by an unsustainable 40 percent from 2004 to 2008, the state budget has now been whittled back from over $7 billion to around $5 billion. Yet what's forgotten is that total state spending, including federal funds and fees paid for by South Carolinians, has actually increased by 14.5 percent since 2007. So instead of following the belt-tightening lead of families across the state by doing more with less, state government has actually expanded its reach into the pockets of taxpayers."

The governor added that when facing a shortfall, tax increases should be a last resort, adding that the tax increase would not solve the state's healthcare problem.

"According to the State Budget Office, the revenue from this tax increase will fall short of covering Medicaid growth within two years or sooner," he explained. "With the recent passage of ObamaCare legislation in Washington D.C., almost half a million South Carolinians will be added to the state's Medicaid rolls and cost state taxpayers an additional $914 million over the next decade. More comprehensive, market-based healthcare reform is necessary, and indeed this tax hike may end up exacerbating the current problem by pushing needed reform that much further down the road."

Legislators say they'll try to gather the votes needed to override a veto.

Two years ago the House went along with Sanford's veto of a cigarette tax increase. But the House's top budget writer said last week that legislators are tired of arguing about the cigarette tax and may override the veto this time.

Copyright 2010 WMBF News. The Associated Press contributed to this report.