House Passes SC Budget With Cigarette Tax Hike

The South Carolina House pulled an all-nighter to finish its version of the state budget, meeting from 9:30 Wednesday morning until 7:30 Thursday morning. The House plan includes a 30-cents-per-pack cigarette tax increase, with the money being put aside in a special fund for health care needs starting July 1, 2011.

The increase would bring in an estimated $88 million. South Carolina has the lowest cigarette tax in the nation at 7 cents.

The move angered smoker Teresa Laverne of Columbia. "I don't think it's fair that smokers should be singled out as a class. It's not fair. Tax everybody if you're going to tax us," she said.

But fellow smoker Allison Walker of Columbia said of the increase, "I don't think it'll stop people from smoking that really do smoke, but it's a wonderful thing that it'll be used for health care."

The House budget also includes a $10 million loan to the Heritage Golf Tournament in Hilton Head if the tournament is not able to find a corporate sponsor next year. Supporters say the tournament means about $87 million in economic activity in the state.

The budget now goes to the Senate, where two senators on the Finance Committee say they don’t think the Senate is likely to include the cigarette tax increase in the budget. Sen. John Land, D-Manning, said, "I predict that the Senate will pass a cigarette tax increase this year and I predict it will be 50 cents or more, meaning it would be 57 cents a pack."

Sen. Harvey Peeler, R-Gaffney, said, "I'm one of those that's not crazy about a tax increase at all. But when I talk to my constituents they say, 'If you must raise a tax, that's the only one we would agree with, is a cigarette tax.'"

Sen. Peeler also says the $10 million loan for a golf tournament is a “non-starter” for him that he cannot support in a budget that cuts education and other basic needs.

State superintendent of education Dr. Jim Rex called a news conference Thursday morning to say that the House cigarette tax is not enough. He wants lawmakers to raise the tax by $1.27 a pack to bring it to the national average.

"We've reached a point now where every district is going to suffer. We have 1,400 fewer teachers in our public school classrooms this year than last. The level of funding that's being discussed will mean thousands of teachers will lose their jobs and/or be furloughed. We're talking about only enough money to run the school buses in South Carolina for 122 days and a 180-day school year. No one is going to escape the carnage next year because of the budget that the House passed last night," said Rex, who's running for the Democratic nomination for governor.

He says half the money could be used to prevent teacher layoffs and furloughs in the coming year with the other half going to health care.