SC Senate Poised To Expand Cigarette Tax Hike

By FITSNews || Because it wouldn’t be South Carolina’s “Republican-controlled” General Assembly without one chamber trying to “out-tax” the other, the S.C. Senate is looking to expand on the thirty cent per pack tax hike that passed the S.C. House of Representatives on an anonymous voice vote earlier this month.

In addition to contemplating a tax hike of fifty cents per pack (twenty cents higher than the House increase) – the Senate is also looking to strip the money generated by the tax hike from the state’s general fund and instead put it into a dedicated “trust fund” that would go toward funding annual Medicaid premium increases.  These already unsustainable premium increases are expected to soar even higher under “Obamacare,” meaning that any revenue generated by a cigarette tax hike will likely be completely absorbed within a few short years – particularly if the tax increase has the expected effect of reducing consumption.

So to recap, lawmakers are proposing to raise a tax on a declining revenue source that will be completely eaten up within a decade by the rising cost socialized medicine.

Yup.

Not at all surprisingly, neither the House nor Senate versions of the cigarette tax hike include any substantive reform – they’re just pouring money down the same drain expecting a different result.  Neither proposal restructures the state’s health care agencies, reforms Medicaid eligibility, implements new fraud protections or – and this is critical – offsets the tax hike with a corresponding tax cut elsewhere in the budget.

Why does that matter?

Well, according to the S.C. Association of Taxpayers, thirteen Senators (ten “Republicans” and three Democrats) have signed a “No New Taxes” pledge that prohibits them from voting in favor of a tax hike that isn’t accompanied by a corresponding decrease.

They are:

Senator Kevin Bryant (S-3 Anderson)
Senator Mike Fair (S-6 Greenville)
Senator David Thomas (S-8 Greenville)
Senator Danny Verdin (S-9 Laurens)
Senator Shane Martin (S-13 Spartanburg)
Senator Harvey Peeler (S-14 Cherokee)-Senate Majority Leader
Senator John Courson (S-20 Richland)
Senator Jake Knotts (S-23 Lexington)
Senator Greg Ryberg (S-24 Aiken)
Senator Nikki Setzler (S-26 Lexington)
Senator Dick Elliott (S-28 Horry)
Senator John Yancey McGill (S-32 Williamsburg, Florence, Georgetown and Horry)
Senator Larry Grooms (S-37 Berkley)

Obviously, we can count another dozen or more lawmakers who campaigned against tax hikes in their 2008 elections.

Make no mistake, FITS will be watching the Senate vote on this issue very closely to see which lawmakers violate their pledge – and which ones renege on their campaign promises.

It’s a “gut-check” vote for the GOP, in other words.

House members voted anonymously for the budget section that included the tax hike, but you can see how each House member voted on an amendment that would have removed the cigarette tax increase by clicking here.

South Carolina spends billions of dollars each year (nearly a third of its $21.1 billion budget) on its fragmented, inefficient health care delivery system.  And with Medicaid services covering approximately 25 percent of the state’s population, you can see how that sort of waste quickly adds up.  Also, the cost of serving this program is also constantly increasing, with last year’s Medicaid growth rate (which occurred during the worst recession in eight decades, mind you) clocking in at around 8 percent.

Despite these massive funding increases, the Palmetto state continues to rate poorly when it comes to the health of its citizens.  According to a recent report by the Trust for America’s Health, South Carolina ranks fifth in the nation in obesity, eighth in diabetes and seventh in infant mortality – despite ranking nineteenth in the nation in per capita health care funding.

Pretty pathetic …