Harrell announces new cigarette tax proposal

Thursday, Speaker of the House Bobby Harrell introduced a bill to up the cigarette tax in South Carolina 50 cents, to 57 cents a pack. Revenues from the tax would go to a “S.C. Healthy Families Insurance Trust Fund.” the fund would provide small businesses and lower income workers the ability to afford quality health insurance coverage.

“This plan will directly reduce the number of uninsured workers in our state,” Harrell said in a statement. “Providing obtainable access to private sector health care coverage will greatly increase the quality of life for those newly insured and create a better future for our state as a whole. Government can help provide solutions, but more government is not the answer to our problems.”

According to the plan, it would provide tax credits to individuals making 200 percent of the poverty line or less, and those credits would cover 75 percent of the health care costs. For small businesses, companies providing 75 percent coverage would be able to receive assistance for 67 percent of those costs.

The second part of the proposal is the creation of the “Palmetto Healthcare Safety Net Trust Fund,” which would address problems created by high risk patients who typically drive up coverage rates.

Last year, a cigarette tax increase passed, but its expansion of the state’s Medicaid program caused it to be vetoed by Gov. Mark Sanford, and then that veto was sustained in the legislature.

At the beginning of the session, Sanford proposed a 30 cent tax increase, offsetting it with an optional flat income tax. The Governor said he was open to other proposals, as long as they were revenue neutral.

Although there are other cigarette tax plans in the legislature, this bill seems the most likely to pass, with Harrell, Majority Leader Kenny Bingham and Ways and Means chairman Dan Cooper backing the plan.