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House lawmakers narrowly approved a 50-cent a pack increase to the state’s lowest-in-the-nation cigarette tax, capping a seven-year push by advocates to raise a tax that has stood pat for three decades.
The bill would use about half of the estimated $160 million raised to expand Medicaid health coverage for the poor, while the about half would help low-income workers buy health insurance policies. Advocates estimate the plan will cover at least 80,000 additional state residents.
In addition, $5 million will help people quit smoking or avoid the habit altogether, and $1 million will help advertise S.C.-grown produce.
House Democrats and some Republicans combined to approve the proposal despite objections by House leadership. The proposal passed by two votes, 60-58. Both sides were scrambling on the floor to twist arms — and votes — of fellow party members.
“It was a struggle,” said Rep. Joe Neal, D-Richland, an advocate of raising the tax. “This is the best investment we can make in South Carolina.”
The proposal is nearly identical to one the Senate approved earlier this month, making it likely the bill could head to Gov. Mark Sanford — who has promised a veto — without needing a conference committee.
Sanford has argued for an equivalent tax cut and argued against the state paying for a Medicaid expansion with a declining revenue source.
House GOP leadership agreed any tax increase should be offset by equivalent tax cuts and pushed for proposals that would offer tax credits to small businesses to purchase health insurance.
The debate was a difficult one for many House Republicans, who had to weigh ideological opposition to government growth and raising taxes against polls showing more than 70 percent of the state favors raising the 7-cent-per-pack tax and its health and deterrence benefits.
“There’s nothing right to do here as a conservative Republican physician,” said Rep. Kris Crawford, R-Florence.
The Senate plan, Majority Leader Jim Merrill, R-Berkeley argued, would grow government and spend the money wastefully.
“We’re just throwing it into a black hole,” Merrill said of expanding Medicaid. “I don’t think people brought you up here to do that.”
But Rep. Phil Owens, R-Pickens, said it was important that smokers help pay the costs of smoking-related health problems. Expanding Medicaid could cost the state down the road, Owens said, but the state should worry about health care coverage today.
“This is a voluntary tax increase,” Owens said. “If you don’t want to pay the tax, don’t smoke.
With every vote affecting which version of the bill the House approved, Republicans like Owens came under pressure from party leadership. Opponents huddled over vote tallies arguing about strategy and trying to lean on members. One Democratic leader ordered staff to man the doors, prevent members from leaving and drag them from the bathrooms to vote if necessary.
Merrill said Wednesday’s votes also could play a part during next month’s party primaries.
The bill will head back to the Senate, where Sen. Finance Chairman Hugh Leatherman, R-Florence, said the body would agree with the House version.
“We’re not going to argue over a million dollars,” Leatherman said of the agriculture money.
But Sanford presents a more difficult hurdle.
Earlier this month, Sanford said he would veto the Senate version. Spokesman Joel Sawyer said the House version also was unacceptable.
If vetoed, House and Senate members would need to get two-thirds of those voting to override the veto. The Senate achieved that goal earlier this month, but the House would need at least 23 more votes to guarantee overturning the veto.
Advocates hoped opponents would decide that raising the tax — and the prevention and health benefits — were more important to them than how the money was spent.
“I think they will vote in our favor, because I think they understand how important it is,” Neal said.
Reach O’Connor at (803) 771-8358.
