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    South Carolina Tax Likely to Rise

    State lawmakers discuss 53-cent increase.

    CHARLESTON, S.C. -- South Carolina's hands-off attitude toward taxing cigarettes, a bow to the state's tobacco farmers, appears to be coming to an end. Sentiment is growing among lawmakers to raise the tax from its current 7 cents a pack to as much as 60 cents, the national average.

    Across the nation, states have tacked on whopping increases to their cigarette taxes in the past two years as an answer to falling tax collections and soaring costs of providing medical care for the poor. Public health advocates are also pushing the higher taxes. The American Medical Association calls cigarette taxes "a proven tool for reducing youth smoking," according to Bloomberg News.

    Currently, South Carolina's cigarette tax is the fourth lowest in the nation, behind only the other tobacco-growing states of North Carolina, Virginia and Kentucky. In the past, any attempt to raise the tax was quickly squelched by lawmakers from the 14 counties that make up the eastern Pee Dee region. There, tobacco farming has been a way of life for generations.

    But that's quickly coming to an end, the result of falling rates of smoking coupled with a settlement by the major tobacco companies with states that sued to recover costs of treating tobacco-caused illnesses. As part of the settlement, tens of thousands of farmers have accepted cash to stop growing tobacco.

    Where 54,000 acres of S.C. tobacco were harvested in 1997, the amount had fallen to 32,000 acres by 2001. And because most farmers now sell their tobacco directly to the cigarette companies, virtually all of the 30-some tobacco warehouses in the state have closed, the report said.

    Backing the cigarette tax increase are the S.C. Chamber of Commerce, the Palmetto Business Forum, advocates of the mentally ill, members of the major medical associations, the staffs of the state's largest hospitals and the AARP, the senior citizen lobbying group.

    A 22-cent-per-pack increase might have passed last spring had not Gov. Jim Hodges, who was in the midst of re-election campaign, called Democratic lawmakers to his office and urged them to oppose it.Now, with just weeks remaining in office after his defeat by Republican Mark Sanford, Hodges has called for a 53-cent increase. "I think, in fairness, this is what the new governor is going to propose and this is what the legislature will embrace," Hodges said.

    While farmers are no longer numerous enough to stop a tax increase, there is another group with an interest in keeping cigarette sales up. The National Association of Convenience Stores (NACS) has opposed raising cigarette taxes in other states. The increases "are leading to a huge increase in Internet and mail-order sales," the group said earlier this year.

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