COLUMBIA -- South Carolina lawmakers have overridden Gov. Mark Sanford’s veto and raised what was the nation's lowest cigarette tax by 50 cents a pack.
Today’s vote by the Senate raises the 7 cent tax to 57 cents a pack on July 1 and leaves Missouri with the nation's lowest tax at 17 cents.
The 33-13 vote in the Senate followed a 90-29 vote in the House on Wednesday after the Republican Sanford had said he wouldn't allow a tax increase on cigarettes unless it was offset by some other tax decrease.
The measure raises nearly $125 million to cover the loss of federal bailout cash next year in Medicaid programs for the elderly, disabled and poor. It also is expected to generate $5 million each for cancer research and efforts to curb smoking and $1 million for agriculture marketing.
The years-long tug-of-war over raising the state's 7-cent cigarette tax for the first time in more than 30 years came down to a final vote in the Senate.
The House voted to override the veto Wednesday over the objections of lawmakers from counties along the North Carolina and Georgia borders who argued that the higher tax rate would hurt the competitiveness of convenience stores. The state tax in North Carolina is 45 cents. It is 37 cents in Georgia.
South Carolina's cigarette tax had not been increased since 1977. The national average state tax is $1.41 a pack.
The federal tax last year jumped 62 cents a pack to $1.01.
"Raising the cigarette tax to 57 cents a pack puts us at an economic disadvantage," Rep. Gary Simrill, R-Rock Hill, said Wednesday.
But other legislators, including Reps. Joe Jefferson of Pineville and Anne Peterson Hutto of Charleston, both Democrats, listed several benefits: A higher tax could deter teens from starting to smoke and prompt others to quit, saving them from future heart attacks and cancer and saving the state money in medical bills for lower-income residents.
The tax increase is projected to raise $136 million, which would sit in a savings account until July 2011. At that time, $125 million would go to pay Medicaid costs, $5 million to the Hollings Cancer Center at the Medical University of South Carolina and $5 million toward helping people quit smoking and also keep them from starting. If there was money left, $1 million would be used to market South Carolina-grown crops.
The state could use the money for Medicaid to draw down a 3-to-1 match from the federal government, bringing in a total of $375 million.
Polls have shown that a majority of registered South Carolina voters favor a cigarette tax increase, according to the South Carolina Tobacco Collaborative. The group is made up of public health organizations across the state that have fought to increase the tax since 2000.
Research by Frank Chaloupka, an economics professor at the University of Illinois, developed in conjunction with the Campaign for Tobacco Free Kids and the South Carolina Tobacco Collaborative, found that money from a cigarette tax is predictable, steady and reliable. The cash flow will lessen over the years as people break the habit but, according to Chaloupka, the decline is "modest, predictable and more than offset by the related reductions in public- and private-sector health care and other economic costs caused by smoking."
Nancy Cheney, a founding member of the collaborative and government relations director for the American Cancer Society, said the House vote brings the state one step closer to a historic victory in public health.
"After 33 years, South Carolina is long overdue for a sweeping public health initiative that will protect thousands of South Carolinians from the ravages of tobacco addiction," Cheney said in a statement.
The money for more cancer research and smoking-prevention efforts will save lives, Hollings Cancer Center Director Dr. Andrew Kraft said.
"An increase in the cigarette tax is a significant child-protection measure for the young people of our state," Kraft said in a statement. "Time and again, we've seen that the vast majority of our patients with smoking-related cancers took up cigarettes when they were in their teens and went on to smoke for many years. Funds from the cigarette tax will enable Hollings to take a leadership role around the state in preventing smoking."
The increase applies only to cigarettes and tiny cigars packaged to look like cigarettes. The tax on regular cigars, loose tobacco and chewing tobacco will not be increased.
Sanford said Tuesday that he vetoed the legislation because it signifies the largest tax increase since the 1980s when the Legislature added a penny to the sales tax to generate more cash for public schools.
Sen. Paul Campbell, R-Goose Creek, said he Wednesday would be among the senators voting to override the veto. He said the state will desperately need the cigarette tax revenue to leverage the federal match money as a way to help cover increasing Medicaid obligations.
"I look at it as a user fee," Campbell said. "You can control how you pay by how much you smoke."
The Associated Press contributed to this report.