COLUMBIA -- Cigarettes in South Carolina will cost 50 cents more a pack, if the House and Senate can agree on a few final details and round up enough support to override an expected veto by Gov. Mark Sanford.
If the two bodies can't agree and the increase fails, then the state could lose up to $375 million in matching funds from the federal government for future health care costs because most legislators want to use the money to offset rising Medicaid expenses.
Cigarette tax advocates scored a victory Wednesday when supporters in the House were able to overcome attempts to cap the tax increase at 30 cents a pack. The House failed over several votes to significantly change the plan the Senate sent April 14.
The bill now goes to the Senate, which can agree to the revised version or push for legislative negotiators to work out a deal with the House.
Sanford has pledged to veto any tax increase that does not come with a corresponding decrease.
South Carolina's lowest-in-the-nation tax of 7 cents a pack has not been increased since 1977. The national average is now $1.40 per pack, having risen for the third time in the last month as more states opt to raise the tax.
The only difference in the versions passed by the House and Senate is $1 million the House wants to set aside for the marketing of South Carolina-grown crops and $3 million the Senate designated in money from the tobacco lawsuit settlement toward infrastructure improvements along Interstate 95. The Senate also agreed to pay $1 million out of the tobacco settlement to the Department of Agriculture for advertising.
In both plans, about $125 million of the $136 million a 50-cent increase is expected to raise would go toward Medicaid costs in the budget that begins July 1, 2011. The federal government matches state dollars in the Medicaid program 3-to-1, generating $375 million for the health care coverage.
The House and Senate agreed to annually give $5 million to the Hollings Cancer Center at the Medical University of South Carolina for lung cancer research and another $5 million toward helping people quit smoking and also stop them from starting.
Procedures in the House did not call for a roll call vote, so it is unclear how many legislators support the plan and how many more would be needed to reach the number needed to override a veto, which is 83 members. The Senate approved the increase in a 32-12 vote, which narrowly shows the support needed to override a veto.
House Speaker Bobby Harrell, R-Charleston, said he thought the House was very likely to override a veto of a 30-cent tax increase, but he isn't so sure there is enough support for the 50-cent increase.
"I am not sure how individual members will vote," Harrell said.
Opponents of the cigarette tax made many arguments against the increase. Some said convenience stores in counties that border North Carolina and Georgia would lose business from smokers who travel to South Carolina to buy cigarettes.
Others were against the increase because it raises taxes, and Rep. Garry Smith, R-Simpsonville, said an economist told him a cigarette tax increase would lead to the elimination of 4,100 jobs in the state. One member wants to use the revenue a cigarette tax increase would generate to buy gold and silver bullion for the state.
Rep. Chip Limehouse, R-Charleston, said he was surprised -- and pleased -- that the House was able to approve the 50-cent increase.
"This should have happened a long time ago," he said.