House Speaker Says This Is The Year for Cigarette Tax Increase

South Carolina hasn’t raised its cigarette tax since 1977, making its tax of 7 cents a pack the lowest in the nation. The average for all states is $1.21 a pack. But House Speaker Bobby Harrell, R-Charleston, thinks this is the year the state will finally raise the tax.

He’s sponsoring the bill the House will work from during debate expected to take place March 24-26, to raise the tax by 50 cents a pack. The money would go to create a tax credit to decrease the uninsured population in the state.

“The idea is to try to create a system where folks who cannot afford health insurance, or where employers don’t provide it for people who are in the lower income areas, that those folks get health insurance provided for them” he says. “If we accomplish that, then it will positively affect the health insurance premiums that all the rest of us are paying, because what’s happening right now is those folks are going to the hospital, being treated as indigents, and then the health insurance premiums all of us pay are going up in order to cover the cost for the hospitals of those people.“

The federal government is already set to raise the federal cigarette tax by 62 cents a pack on April 1, but Harrell says he doesn’t think that will hurt his bill’s chances.

Smoker Shontel Smith doesn’t like the idea of paying more, but she also doesn’t have health insurance. “I think by raising the taxes, I don’t think that would be a problem if they’re helping us with the health insurance,“ she says.

Fellow smoker John Starino agrees. “I’m willing to pay a little bit more for it if it goes to the reason that it’s stated and someone in the legislature doesn’t take the money and use it for some other reason.“ 

State lawmakers passed a cigarette tax increase last year but Gov. Mark Sanford vetoed it. He was against a tax increase without an offsetting tax reduction somewhere else. His spokesman, Joel Sawyer, says the governor will use the same criteria this year. If the bill isn’t revenue neutral, he won’t sign it.

Speaker Harrell says his plan is revenue neutral because, while it does raise the cigarette tax, it also provides a tax credit.

He understands the governor’s reluctance to raise taxes and says that’s why the state hasn’t raised the cigarette tax in more than three decades.

“A lot of us just don’t want to raise taxes,“ he says. “I’ve opposed doing it, frankly. The reason I’m supporting this effort right now is I believe this tax increase is coming, I mean the cigarette tax increase is coming, and if it’s going to happen, I’d like to make sure that we use it in a method that utilizes the private sector, provides a tax credit and causes people to get health insurance.“

New York has the highest state cigarette tax at $2.75 a pack. Georgia’s is 37 cents, ranking it 44th while North Carolina’s is 35 cents, ranking 46th.