Commentary: S.C. must raise cigarette tax

This editorial appeared in The Rock Hill Herald.

After seven years of fruitless debate over increasing South Carolina's lowest-in-the-nation cigarette tax, hopes of doing so this year are uncertain.

Lawmakers passed a sensible bill last year, raising the 7-cent tax by 50 cents and devoting most of the proceeds to expanding Medicaid programs for the poor. But that bill was vetoed by Gov. Mark Sanford, and the Legislature did not have the votes to override the veto.

This year, leaders in both the House and Senate appeared determined to raise the cigarette tax and assemble enough votes to override Sanford's veto. But while the desire was there to raise the tax, battle lines soon developed over how to spend the proceeds.

Sanford, predictably, promised to veto any tax increase that wasn't accompanied by a matching tax cut. Republican lawmakers, however, devised a plan to use $100 million of the $145 million generated by the tax increase to pay for tax credits that low-income residents could use to buy health insurance.

Under this plan, people making up to $21,000 a year could get tax credits covering 75 percent of an individual health insurance policy. The maximum credit would be $3,000.

Supporters of the plan said it was the only one that could survive a Senate floor debate. But Democrats threatened to block the plan. They argued that it makes no sense to create a new bureaucracy to cover overhead costs at insurance companies to support a new program when the money could go directly into expanding Medicaid programs that cost less to run.

To read the complete editorial, visit The Rock Hill Herald.