The House Ways and Means Committee approved a 30-cent per pack tobacco tax increase Wednesday. Supporters say it would generate $90 million for a Medicaid reserve fund.
But first Committee members rejected Charleston Republican Chip Limehouse’s proposal for a 50-cent per pack tax increase. The 50-cent proposal was attacked by lawmakers representing districts that border on North Carolina and Georgia. Cigarette smokers commonly cross those stateliness to make buys at much cheaper prices. York County Republican Gary Simrill said there are a lot of lawmakers from border counties. He noted that the House passed a 50-cent increase last year and he said such a measure would not get through the Senate.
Orangeburg Democrat Gilda Cobb-Hunter said that there was little evidence in writing that supported the argument made by tobacco retailers in border counties. She said there was no good reason not to attach the tobacco tax to the national average.
Cobb-Hunter’s HUF proposal–HUF is short for Healthcare User Fee–would have generated $238 million annually for healthcare and raise the tax on a pack of cigarettes from 7 cents up to $1.27. The money would have been used as Medicaid Expansion Funds, drawing down a four to one match from the federal government. After the first year, the tobacco tax would have kept up with the national average automatically each year.
After the amendment failed, Cobb-Hunter lowered her proposal to 50 cents a pack, stipulating that the extra revenue would go into a trust account, that would not immediately be used for any specific puporse.
In other business Wednesday, the Committee barely rejected on a 12-13 vote Williamsburg County Democrat Ken Kennedy’s proposal that would have consolidated school districts statewide. Kennedy says the measure would save between $500 million and $700 million annually.
Committee members also planned to reduce the number of low-income children eligible for Medicaid programs next year, closing the program to newcomers whose parents earn more than 150 percent of the poverty level.