Medicaid plans factor in action

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COLUMBIA --- For some, a 50-cent tax increase on cigarettes means 450 school buses full of kids will not smoke.

But for others, a tax increase would spur unsustainable growth in government spending because tax revenues would be used to expand Medicaid eligibility.

The Senate is set to debate raising the state's cigarette tax from 7 cents to 57 cents a pack -- a 714-percent hike. South Carolina has the lowest cigarette tax in the nation, and the boost would still leave it among the lowest.

The increase would create more than $150 million in revenue the first year, according to Senate staff. Of that, $5 million would go toward anti-smoking programs, and the rest would be used to qualify as many as 178,000 more people for Medicaid.

In Aiken County, 32,400 people are eligible for Medicaid, according to the Health and Human Services Department.

But under the proposed bill, H. 3567, those numbers would grow to include, in some cases, children living at 21/2 times the federal poverty level, or $53,000 for a family of four. Some say pumping the revenue into broader government services could be difficult to sustain.

"If you're going to rely on increased taxes on cigarettes, you're perpetually going to have to continue to raise taxes as health care costs increase. It's not fiscally sound," said Bryan Cox, spokesman for the South Carolina Policy Council, a pro-business organization.

Gov. Mark Sanford's spokesman Joel Sawyer said the governor has called for any tax increase to be offset by another cut, preferably in the state income tax.

In the Senate, 14 of 46 members have signed a pledge with the South Carolina Taxpayers Association, promising that they will not raise taxes. Among them is Sen. Greg Ryberg, R-Aiken.

Reach Sarita Chourey at (803) 727-4257 or sarita.chourey@morris.com.

50-CENT INCREASE

How do minors factor in?

- Experts say increasing the price of cigarettes will squeeze kids' finances, but it won't change other factors, such as whether store clerks will sell to them.

- About 19 percent of South Carolina high school students smoke, according to the South Carolina Youth Tobacco Survey.

- Aiken County was the second-easiest county among 12 western counties (Edgefield County was first) for a minor to purchase cigarettes, according to state data.

How will farmers be affected?

- Tobacco farmers are expected to be hurt by the increase, so the South Carolina Farm Bureau wants farmers to get a $2 million chunk of the revenues for branding and marketing replacement crops.

- Fruit and vegetable farmers would escape the impact of the increase, but they would still benefit from any revenues allocated for general agricultural marketing programs.
-- Morris News Service

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HTN007
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HTN007 05/06/08 - 02:04 am
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'It's not fiscally sound,"

'It's not fiscally sound," ...........what about 1]funneling the proceeds of this tax into having more money for healthcare 2] less smoking - increasing the price of a pack of cigarettes reduces teen smoking 3] less bypass operations and stents for blocked arteries 4] fewer cases of lung cancer 5] fewer strokes. So, what is fiscally unsound about THAT? In fact, maybe all income tax in SC should be replaced with cigarette taxes? Then the price of a pack of cigarettes might adequately reflect the damgage done to the healthcare system and noboby would be able to afford to smoke cigarettes any more. Wouldn't that be a tragedy?

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