Higher cigarette tax set to become law

The effort to raise South Carolina's cigarette tax by 50 cents a pack cleared its most stubborn hurdle Wednesday when House lawmakers overrode Gov. Mark Sanford's veto of the bill.

The Senate is expected to make the tax increase law today, ending a decade-long march toward increasing the lowest-in-the-nation 7-cent-a-pack cigarette tax.

The tax increase will raise a projected $135 million annually to be spent on state-run health care programs. Supporters also say the tax increase will discourage young people from taking up the habit.

"After 33 years, South Carolina is long overdue for a sweeping public health initiative that will protect thousands of South Carolinians from the ravages of tobacco addiction," said Nancy Cheney, government relations director for the American Cancer Society and a founding member of the S.C. Tobacco Collaborative.

Cheney has led the collaborative's 10-year effort to increase the tax.

According to the Campaign for Tobacco-Free Kids, a 50-cent increase will prevent more than 23,000 S.C. children from becoming smokers and persuade nearly 13,000 adult smokers to quit.

The House overrode Sanford on a 90-29 vote, a margin wider than expected considering lawmakers in border counties worried the increase would put S.C. merchants at a disadvantage with those in neighboring states. Also, many lawmakers have signed pledges not to raise taxes in a year the House is up for election.

In a brief and generally muted debate before the vote, advocates for the tax focused on the potential health benefits.

"We know it will raise revenue. We know it will save lives. We know it will deter young people from ever starting," said Rep. Anne Hutto, D-Charleston, on the House floor Wednesday.

House lawmakers opposed to the bill argued it would hurt South Carolina's already recession-riddled economy.

"By raising the cigarette tax, it puts us at an economic disadvantage," said Rep. Gary Simrill, R-York, adding that a 57-cent S.C. tax will be higher than neighboring North Carolina's 45-cent tax and Georgia's 37-cent tax. Twenty of the state's 46 counties border another state.

"It does not do employers and employees in this state justice. It hurts us."

Rep. Joey Millwood, R-Spartanburg, said the increase is an infringement on personal freedom.

"When did it become government's role to tax you so that you don't do something?" Millwood said, noting that he likes to eat cheeseburgers even though they're not good for his health.

Advocates for the tax increase, including the AARP, say the funds will go a long way in helping the state's recession-damaged budget. Next fiscal year, the state faces an added $1.2 billion revenue shortfall, likely to result in more state employee layoffs and cuts to education, public safety and other state services.

Most of the $135 million raised annually would be used to offset federally mandated health care expenditures for the poor.

Specifically, $125 million would be spent on the Medicaid program.

Cancer research at the Medical University of South Carolina would get $5 million, as would anti-smoking programs to help smokers stop and prevent young people from starting.

The Medicaid spending would draw additional federal dollars lawmakers anticipate the state will need next year when federal stimulus dollars will largely disappear.

For every $1 the state spends on Medicaid, the federal government will pony up at least $3.

Cigarette tax advocates point out the state has lost more than $3.5 billion since 2002 in new federal matching dollars. The state, they argue, could use the additional revenue.

In 2008, both the House and Senate passed a 50-cent cigarette tax increase. Sanford vetoed the bill, and the House failed to muster the necessary votes to override.

But this year the dire budget predictions may have swayed some previous "no" votes.

The president of the state Association of Taxpayers said he's disappointed in legislators who had signed pledges not to increase taxes, but the budget crisis shifted attitudes.

"In the past, it was easy to argue we don't need the extra revenue, but in these lean times, there was just a sea change," said Don Weaver.