Burning the midnight oil Wednesday night, South Carolina House members continued their battle over the budget before wrapping up Thursday morning . House members voted 106-12 to keep a 30-cent cigarette tax increase in the budget. Thursday morning at the Statehouse, State Superintendent of Education Jim Rex called the 30-cent increase woefully inadequate. Rex called on the state Senate to do what the House was unable or unwilling to do and that is to raise the state cigarette tax to the national average of $1.34 a pack. Rex says the $240 million in revenue generated by the tax increase would be a win-win for education and health care.
“If we took half of the $240 million that would be generated as a result of going to the national average and put it into education, that would negate the need to furlough 48,000 classroom teachers for a week. We take the other half and put it into health care because of the three-to-one and four-to-one match that we get from the federal government for Medicaid, that would be more than a half billion dollars that would go into our economy, and that’s where these health care jobs would be created.”
Rex says the health care jobs that would be created would be in the range of 20,000. Rex repeated his earlier proposal that when the economy recovers and education funding reaches at least 2008 levels, he would like to see the entire revenue stream from the cigarette tax go toward health care.
Rex says he understands that there is concern from legislators and citizens who live in border counties that a substantial hike in the cigarette tax would hurt commerce, but he says evidence from other states prove otherwise.
“I know that there are some retailers are concerned that if we ask smokers in South Carolina to pay what smokers in other states pay, that it would have some type of dramatic negative impact on their retail sales. The experience in other states, and we have lots of it, that’s why the national average is so much higher than our average, has not shown to be the case. I understand their concern. I think it’s misplaced.”
Rex says a higher cigarette tax would not only create a much needed source of revenue for the state, but it would also lead to the creation of a healthier South Carolina.
“Sixty-six-thousand teenagers would not become addicted to cigarette smoking. That means a lot. It means that 32,000 adults in South Carolina would give up smoking because of the increased price. That will obviously make them healthier. The statistics that should impress most of us in terms of our fellow citizens is that 27,000 South Carolinians would not die prematurely from smoker-related illnesses.”
Rex says he understands that ultimately the source of revenue from the higher tax will slowly diminish as more and more people choose not to light up.
“This is not a tax on income, this is not a tax on business. This is not a tax on property. This is a usage tax. If it has the impact we want in terms of healthiness, over time gradually we’ll see that revenue source begin to go down. We would also hopefully see our health care costs go down which would be a a way of compensating for that decrease over time.”