The odds of passing a cigarette tax hike in the state Senate still may be high, but at least the action taken last week by the Senate Finance Committee offers hope that the state is inching toward doing the sensible and responsible thing.
After a long debate, members of the committee agreed to a plan to increase the tax on a pack of cigarettes from 7 cents -- the lowest in the nation -- to 57 cents. The hike would generate an estimated $159 million. Of that, $5 million would go toward a smoking cessation and prevention program, and the rest would be used to leverage federal funds for Medicaid, which provides health care to low-income people.
Because the federal government gives $3 for every $1 the state dedicates to Medicaid, the added money would increase overall Medicaid funding by $511 million each year. That would enable the state to help an additional 177,000 people, including more than 70,000 children.
But raising the cigarette tax for the first time in more than 30 years would have another important benefit: It would reduce smoking in the state, especially among teens. S.C. Sen. Wes Hayes, R-Rock Hill, said that was his primary motivation for leading the fight to adopt this plan.
An increase in the cost of cigarettes can have a significant impact on the smoking habits of young people who have little disposable income and are more likely to be discouraged by the higher price. Research in other states indicates that raising the cost of cigarettes by 10 percent can reduce teen smoking by 7 percent.
Better yet, thousands of young people could be prevented from getting hooked on cigarettes in the first place. That, alone, could save the lives of tens of thousands of South Carolinians.
Smoking-related illnesses are responsible for more than $1 billion a year in health-care costs paid by the state, with more than $360 million of that coming through Medicaid. So, reducing the smoking rate would save both lives and money.
Even with the proposed increase, South Carolina's cigarette tax still would be only about half the national average. Nonetheless, some senators will oppose any tax increase that is not balanced by a corresponding tax cut.
Other senators favor an alternative proposal to use revenue generated by the tax increase to provide tax credits for individuals and small businesses to buy health-care insurance. But the tax credit would be worth only about $475, hardly enough to cover annual health insurance costs, which one estimate put at $4,200 for an adult and $1,500 for a child.
The state would receive the best return on its money by using tax revenues to secure the 3-to-1 federal match -- with the crucial benefit of reducing teen smoking. We hope advocates of this plan can convince fellow senators to go along.
State could benefit from federal funding and reduce smoking by raising cigarette tax.
What do you think about this editorial? Come to community.heraldonline.com and tell us.