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The cigarette tax: A lesson in failing to plan for the future

By Sen. Shane Massey
web posted May 21, 2008
Spending money is pretty easy for all of us.  It’s especially easy when it’s not your money you’re spending.

In the S.C. Senate, we’ve made some bad spending decisions recently that I’ve taken issue with.  I always try to remember I’m spending the hard-earned money you pay in taxes.  I wish more of my Senate colleagues thought that way.

Cigarette Tax
One of those spending issues came up this month: the cigarette tax.

The bill that passed the Senate did not get my vote because it puts our state at great financial risk.

If you followed the debate, you know that the current S.C. cigarette tax is 7 cents per pack, the lowest in the nation.  The proposal would raise our tax to 57 cents per pack, 20 cents above the Southeastern average, and provide $160 million in new revenue for our state.

I support raising the cigarette tax, but the devil is in the details of the spending plan.  The Senate earmarked the tax revenue for three items:
•    Smoking cessation programs;
•    Providing greater access to health insurance; and
•    Expanding Medicaid.

The first two initiatives are great ideas, but I cannot support expanding a rapidly growing entitlement program with diminishing funds.  Here's what I mean.

In the past five years, our Medicaid spending has jumped from about $720 million a year to over $1.1 billion this year.  That's a 50 percent increase in just five years.

Our total state budget is about $7 billion, and we’re already spending $1.1 billion on our current Medicaid obligations. 

Keep in mind that one reason we are raising the cigarette tax is to deter smoking, a worthwhile cause.  Under this bill, we would be spending millions of dollars to expand Medicaid, and we would do it with a diminishing revenue source (people who stop smoking don’t buy cigarettes, so the state receives less money).  Using this process will guarantee that we have less and less money to put into Medicaid in the future.  In other words, we’ll create an incredible financial burden on the state in years to come.

That’s terrible fiscal policy that comes on the heels of our Legislature spending all of its $1.5 billion surplus last year because of equally poor planning.

Voting the way I did wasn’t easy, but I believe you sent me to Columbia to make the hard choices to benefit all citizens in the long run.  Many of you contacted me on this issue, and I certainly appreciate your insights and support.

Spending Caps
This week, the Senate will be debating a constitutional amendment to limit state government spending.  Based on the above information, it’s obvious the General Assembly needs some additional restraint on spending.

Spending money irresponsibly has become too easy for Legislators.  I’m for anything that will make us spend money the way you would, carefully and purposefully.

Education Accountability Act
The Senate unanimously passed a bill last week that will help our teachers gain ground on educating their students.

Most people are familiar with PACT (Palmetto Achievement Challenge Test, which is given to students in third through eighth grades).  Teachers use it to evaluate how good a job they’re doing in educating students.

PACT is given at the end of the school year, and the results aren’t back until the next school year, when the child is in the next grade.  In addition, it only gives a raw score, so teachers receive no feedback on specific areas where students need additional work.

This new proposal eliminates PACT and replaces it with a test that gives teachers faster and more specific feedback.  Overall, it helps the teachers and the students while keeping us all more accountable.

Contact Me
There’s not much time left in this Legislative session, but if you have an opinion on these issues or any others, you can always contact me by telephone (803-480-0419), email (shanemassey@scsenate.org), or regular mail (P.O. Box 551, Edgefield, SC 29824).  Or just pull me aside when you see me.

Together, we are beginning to make a difference in South Carolina.  I thank you for taking the time to participate.


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