Wednesday, April 09, 2008

The Two GOP's of South Carolina

In state where the opposition is not only ineffective, but darn near moribund, some people think we live in a one-party state. But that's not true. There are, in actuality, two (maybe three) different GOP's that govern South Carolina. The first, pragmatic, pro-business, deficit conscious, and unafraid to think differently about serious issues. The second, reactionary, anti-growth, anti-tax, anti-thought.

From the Upstate, comes a glimpse into the two very different South Carolina Republican Parties. In response to constituent questions about the whether or not South Carolina will seize an historic occasion to address a serious public health issue, create a powerful economic stimulus and reduce the number of children who get addicted to cigarettes, are these responses. (Note: the personal information has been deleted.]

From: SENATE RULES COMMITTEE MAILBOX [mailto:SRU@scsenate.org]

Sent: Tuesday, April 08, 2008 2:18 PM

To: REDACTED

Subject: Re: Cig Tax

DEAR [Redacted]:

Thanks for your email and comments about the tobacco tax. I am supportive of increasing it and am hopeful that we can move a plan through the Senate that will be successful. The Finance Committee was split 12-11 in its vote to send the bill to the floor with the proceeds earmarked to Medicaid. Yes, we can earmark dollars to cover onlychildren through the CHIPS program. However, it will take a two-thirds vote to pass it since the Governor has made it clear that he will only sign a bill that is revenue neutral. I shared with some of my colleagues this morning that we should hold up this week on taking upthe bill and see if we can put together something that we can be reasonably certain will gather a two-thirds vote. Otherwise, once the debate begins it will likely consume the rest of the session if a solid plan isn't developed and we might still be at an impasse on the issue.

Thanks again for being in touch. Hope you're doing well and [redacted].

Take care,
Larry [Martin, R, Senate District 2, Pickens County]

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From: SENATE BANKING & INSURANCE COMMITTEE MAILBOX [mailto:SBI@scsenate.org]
Sent: Wednesday, April 09, 2008 11:01 AM

To:[Redacted]

Subject: Re: Tobacco Tax for Healthcare

Dear [Redacted],

Thank you for your input regarding the cigarette tax increase. My problem with the tax credit proposal presented to the full Senate Finance Committee funded by $160 million from a cigarette tax increase is that it would not create the incentives necessary for people to be able to buy insurance. The total incentive was only $475 per person per year for a husband and wife at 250% of the Federal Poverty Level (FPL). Insurance in South Carolina for a couple might cost $7,000. The total incentive of less than $1,000 for 250% FPL would not come close enough to giving them enough tax credit to purchase insurance. I brought this out during debate, and no one could answer this essential issue. Because assignment rights were also included, I began to question what would happen to the money that belonged to a qualified individual if no insurance had been purchased. Would the money then flow to providers who would simply grab the assigned money and provide no better services than the uninsured currently receive in our health care system? The assignment to a provider would not necessarily translate into better service. It would provide more money for the provider, but there is no benefit at all to the uninsured and would not give them the better hospital coverage that insurance would provide. Therefore, in my mind, the entire proposal was flawed. This proposal was voted down in Committee.

You may know that I have been working in Senate Banking and Insurance on S. 1129 called SC HealthNet and was devised to a large degree by Scott Richardson, Director of the Department of Insurance. This bill would provide a no frills insurance policy capped at $150,000 and approximately half the cost of regular insurance.

The cigarette tax proposal that passed the Finance Committee by a vote of 12-11 would use the tax to obtain Federal-matching funds in order to expand Medicaid programs by increasing the levels for adults from 50% to 100% FPL and increasing children from 150% to 200% FPL. Again, I questioned the fiscal impact of this proposal. Eight years ago when the State increased its Medicaid coverage for adults and children the strain to the budget was unexpectedly high. The Director of the DHHS confirmed there would be a much broader fiscal impact than the cigarette tax and Federal-matching funds would cover. Therefore I voted against this proposal as well. Given the downturn in the economy such a step would be foolhardy.

I am in favor of a proposal that would give a tax credit to people in need or a general tax credit to the public in exchange for a cigarette tax increase. Senator John Courson will introduce this type of amendment on the floor when we take up this bill.

Cordially,
David L. Thomas [R, Senate District 8, Greenville County]

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Senator Martin represents the first GOP, Senator Thomas the second.

As the two GOP's struggle, they are, for all practical purposes, two different political parties, not just two wings of the same party. The cigarette tax is just one of the issues above which they are wrestling for the future of South Carolina. The winner takes all.

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