Raise cigarette tax, trim health care, Sanford says

COLUMBIA --- Tens of thousands of low-income South Carolina children granted health care coverage last year would lose the government-paid insurance under a budget plan unveiled by Gov. Mark Sanford on Monday.

The GOP governor, who has repeatedly decried spending by the Legislature, is looking to save $22 million by axing the coverage for about 70,000 low-income children in the state.

"We cannot grow government faster than people's paychecks and wallets," he said Monday in releasing his budget plan for the next fiscal year. "This will be a tough budget year."

Mr. Sanford has repeatedly criticized his fellow Republicans, who control the Legislature, for spending too much during prosperous economic times. His plan, which needs legislative approval, would hire more state troopers, cut income taxes, raise the nation's lowest per-pack tax on cigarettes and spend an additional $50 million for land conservation.

To encourage early graduation, Mr. Sanford wants to give $2,000 to teens who earn enough credits to graduate high school after three years and $1,000 for students who graduate one semester early.

Mr. Sanford's plan would reduce the state's current budget by $326 million, to $6.8 billion.

The largest single-item savings would come from undoing an expansion of the Children's Health Insurance Program, and it drew swift criticism from advocates of the plan, which is aimed at covering children of parents who make too much money for Medicaid but who still lack insurance. An estimated 700,000 South Carolinians lack health insurance coverage.

The governor's spending plan would also put an additional 50 state troopers on roads and hire 228 new prison guards.

Mr. Sanford wants to raise South Carolina's cigarette taxes by 30 cents per-pack, to 37 cents and use the estimated $107 million to cut income taxes.

Critics contend the plan would funnel the most income tax savings to higher wage-earners.

The governor's spending plan includes saving $17.6 million by not rehiring employees approaching the end of a five-year retiree incentive program and saving $16.4 million by moving the state health plan's pharmacy benefits to generic drugs. It also proposes reducing money to research colleges to encourage collaboration.