50-cent cigarette tax increase headed to SC House

by Lesley Politi on April 9, 2009

50-cent cigarette tax increase headed to SC House

By JIM DAVENPORT , 03.23.09, 05:00 PM EDT

The nation’s lowest cigarette tax would jump by 50 cents and support a new health insurance program for low-paid South Carolina workers under a plan that’s expected to reach the state House this week.

The bill, introduced by House Speaker Bobby Harrell, R-Charleston, would raise the current 7 cent-per-pack tax to 57 cents. That generates $147 million, with $139 million for the insurance program. It also sets aside $5 million for anti-smoking efforts and nearly $3 million for marketing South Carolina agriculture products.

Under the new insurance program, workers who earn up to 200 percent of the federal poverty level would get a 75 percent credit on health insurance through the Palmetto Health Care Safety Net Program. The state support would be capped at $3,000 a year. The credit would become available in July. The current federal poverty level for individuals is $10,830.

For small employers, the program would pay for 67 percent of a policy, up to $3,000 a year. The amount of state support would be adjusted yearly, but couldn’t fall below 50 percent of the premium.

Officials expect the cigarette tax revenue will fall over time, but House Ways and Means Committee Chairman Dan Cooper, R-Piedmont, said that’s not a problem for the state.

“When the money runs out, that’s it,” Cooper said. “Whatever the tax generates is how much would go into that pool.”

Cooper chairs the subcommittee that takes up the bill Tuesday. He expects little opposition to the insurance proposal as a way to bring federal Medicaid matching cash into a private health insurance system. A nearly identical plan is used in Oklahoma,

Source: www.forbes.com

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