Tobacco News and Interesting Information

A proposal to raise the tax on cigarettes by 50 cents per pack ran into familiar quicksand Tuesday, after the plan became mired in Senate arguments over how to spend the money.

A Senate subcommittee approved the House-passed bill, but voting on the plan by the Senate Finance Committee was postponed until at least this morning after some senators announced they would vote against the legislation in its present form.

"As I look around this committee, I think a large majority supports doing something on an increase," Sen. Nikki Setzler, a Lexington County Democrat, told his colleagues.

"But this bill could either die in the next five minutes with a vote, it could die with a minority report or go out of here with a tie vote or a one-vote margin to the Senate, where it's never going to be considered this year."

Supporters of an increase said afterward they hope a compromise can be worked out overnight.

"Our issue is not how they spend the money," said Jim Bowie, executive director of the South Carolina Tobacco Collaborative, a group that has pushed for an increase. "Our issue is we need to start the prevention efforts as soon as possible."

The current tax of 7 cents per pack is the lowest in the nation. A 50-cent increase would generate about $144 million, most of which would be spent under the House plan on premium credits for health insurance for low-income workers and small businesses. Individuals would get a maximum credit of $3,000 toward a state-approved policy, while businesses and workers could get credits toward a health insurance plan arranged by the employer.

A Senate subcommittee voted Tuesday to spend $5 million off the top of the revenue for the Hollings Cancer Center in Charleston and $750,000 for federal health centers in the state.

But what drew questions and criticisms Tuesday, especially from Senate Democrats, was the plan to spend most of the proceeds on insurance credits.

Sen. John Land, leader of the Senate Democrats, predicted the plan would fail, that the federal government wouldn't approve matching funds and that the program didn't make sense from a numbers point of view. He argued that spending the money on a health insurance program would mean some of that amount would go for insurance premiums and insurance administrative overhead, as well as for millions to two state agencies to manage the program.

Land said far more people could be covered by placing all of the proceeds in the state's chief Medicaid agency to pay for more Medicaid services.

"I think it's the craziest thing I've ever seen us deal with," Land said of using the money to pay for health insurance credits. "It is wrong. It won't work. It's a vast waste of public money."

Sen. Ralph Anderson of Greenville and Sen. Phil Leventis of Sumter, both Democrats, agreed, arguing the state need not create new programs when it could invest the tax revenues in the agency that already handles health care for the poor.

Sen. John Courson, a Columbia Republican, said he would only support a revenue "neutral" plan, such as using the money on tax credits, something he said would prevent a veto from Gov. Mark Sanford.

The committee will meet Thursday morning to work out a compromise.