COLUMBIA — The price of cigarettes might go up more than a buck a pack in South Carolina as the federal and state governments turn to smokers to raise money in a cash-strapped economy.
House Speaker Bobby Harrell, a Charleston Republican, is expected to file a bill as early as today that would raise the state's tax — the lowest in the nation at 7 cents — by 50 cents to help the working uninsured with health care. The proposal follows a decision by Congress earlier this month to raise the federal tax by 62 cents.
Although the details are still being hammered out, Sen. Thomas Alexander, a Walhalla Republican who championed the issue in the Senate last year, said the discussion should move forward this year in an attempt to improve access to health care coverage.
"If anything we have more uninsured because of economic conditions than less," Alexander said. "I think it's the right policy for us to move the state forward."
For the past few years, the Legislature has made smokers the butt of their only efforts to raise taxes. Lawmakers passed a 50-cent increase last year, but the House was unable to override a veto by Gov. Mark Sanford.
Sanford supports a cigarette tax increase, but he wants to use the revenue for tax cuts. The governor's office said Wednesday that he would again veto any tax increase that does not come with a corresponding decrease in other taxes.
Smokers across the state, who have grown accustomed to the tax target on their backs, took the news of a state hike less than enthusiastically Wednesday.
"I'm not going to quit," said Michael Randall, who was having a smoke at the Sand Dollar Social Club on Folly Beach. "They've got to get it from somewhere, but ... hopefully it won't pass."
Nettie Crane, a Folly Beach resident, said she realizes the state needs money but wishes they could spread it around.
"I think they probably should do something," Crane said, "but it seems like cigarettes are about it."
South Carolina has enjoyed cheap smokes for years. The average cigarette tax nationally is now $1.21, with rate increases pending in Kentucky and Arkansas, according to the Campaign for Tobacco-Free Kids. Georgia taxes each pack of cigarettes at 37 cents, and the rate is 35 cents in North Carolina and 34 cents in Florida. New York's tax is the highest at $2.75 a pack.
The rate in South Carolina has not increased since 1977. The federal tax will jump to $1.01 per pack from 39 cents per pack on March 31 to extend health care coverage to 4 million uninsured children.
ReynoldsAmerican's communication director Frank G. Lester said it's a bad time to raise the tax, given the economy, the federal cigarette tax increase and the $8 billion in stimulus money earmarked for South Carolina..
"A recession is not the time to raise the tax, much less on the people who can afford the tax least," Lester said. The company's data show that more than half of smokers in the United States are classified as the working poor.
Kelly J. Davis, cigarette tax campaign coordinator for South Carolina Tobacco Collaborative, said smokers are found in all socioeconomic groups, and the cost of the habit on Medicaid and health care affects all South Carolina households, whether a smoker lives there or not.
The collaborative is pushing for an increase that will raise the tax here to $1 a pack as a way to keep kids from becoming smokers and to raise money to pay for programs that help smokers quit and offset health care costs.
"Smoking places the burden on every single South Carolinian," Davis said.
Had the cigarette tax increase passed the Legislature last year, an estimated $159 million would have been split between extending Medicaid to as many as 200,000 and providing tax credits for more workers to buy insurance.
The bill also called for all other tobacco products to be taxed at 5 percent of the manufacturer's price.
Sanford politicked to keep his veto from being overturned largely by calling the tax into question. He argued that money raised from a cigarette tax increase would decrease as more smokers quit and fewer young people started the habit, while the cost of Medicaid would only continue to go up.
Harrell, who did not want the money going to Medicaid, helped sustain Sanford's veto last year and promised then to introduce a new proposal. His bill will be one of about a dozen filed this year.