SC House lawmakers approve $5B spending plan

By SEANNA ADCOX, Associated Press Writer

COLUMBIA, SC (AP) — The South Carolina House sent the Senate a $5 billion budget for the coming year on Thursday, after an all-night session that focused on abortion, cigarette taxes and a loan to a golf tournament.

The House approved the budget 64-52 as daylight filled the chamber, with a final vote minutes later. It was the House's first all-night session in at least a decade.

The plan would raise the state's cigarette tax by 30 cents a pack to 37 cents. The money goes to a trust fund for Medicaid expenses, to be used starting in 2011-12. Legislators rejected repeated efforts to raise the tax more.

Still, Rep. Chip Limehouse, who pushed for a higher increase, called the 106-12 vote to keep the 30-cent hike in the budget a "major coup." South Carolina's lowest-in-the-nation cigarette tax hasn't changed since 1977.

"We've got half a loaf of bread here," said the Charleston Republican, noting South Carolina's better off than other states. "We're balancing our budget. We're paying our bills."

The plan bans most abortions for those covered by the state insurance plan, the only rare exception being if an abortion was an "incidental" effect of a doctor trying to save a mother's life, provided the doctor was working to save both. Opponents noted it's not much of a money-saver. Legislators said half a dozen women received a state-paid abortion last year under the current exceptions to victims of rape or incest and women whose lives are in jeopardy.

Republicans argued it's an ethical issue about protecting the innocent, and that a child should not pay for a father's crimes. Democrats accused their GOP counterparts of playing God and imposing a religious viewpoint.

The budget bill also promises to loan the state's only PGA golf tournament $10 million if it can't find a new sponsor.

The budget is down from $7 billion two years ago. It allows state employee furloughs as a way of dealing with cuts. Layoffs are expected at many state agencies.

It avoids further cuts in health and medical programs, including those for the disabled, by designating the bulk of $200 million expected from federal Medicaid assistance not yet approved by Washington. The rest would go in savings to help offset an expected $1 billion budget gap for 2011-12, when federal bailout money runs out.

In an e-mail to legislators, Gov. Mark Sanford said it would be wiser to set aside that $175 million, indicating a possible veto.

The heated abortion debate followed the House's 57-54 vote late Tuesday rejecting the ban. But Republicans opted to reconsider the issue. Democrats' attempts to restate the exceptions — including a broader life-of-the-mother appeal — were rejected, as were proposed requirements that the state be responsible for a child's health and education if the ban prevented a victimized mother from getting an abortion.

"Our priorities are all messed up," Rep. Leon Howard, D-Columbia, said after the nearly six-hour abortion debate, which followed repeated rejections of proposals to raise money to stem agency cuts.

A bipartisan plan would have raised the cigarette tax by $1 and divided the revenue between the health care trust fund, income tax reduction and education. It was backed by Republican Rep. Kris Crawford of Florence, the House's only doctor and a former smoker.

"The teenagers I take care of in the emergency room have convinced me," he said. "You can price them out of their reach. If you're going to vote to raise this tax, you're going to do it once. You might do it this year and again in a decade — maybe. If you're going to move it, move it someplace meaningful."

But the proposal failed 68-42.

Beyond higher cigarette taxes, Democrats' ideas included lifting the state's $300 sales tax cap on vehicles, suspending tax credits and suspending a 2006 law that swapped a higher sales tax for lower property taxes. They also suggested adding a penny to the 6-cents-on-the-dollar state sales tax, and a tax shift proposal to create a new tax for homes worth more than $250,000 while reducing the state sales tax by a penny.

Democrats said the GOP-majority's mantra of no new taxes and repeated cuts is moving South Carolina backward and exacerbating suffering in a state with 12.6 percent unemployment. They accused Republicans of postponing tough decisions on how to stabilize an economy increasingly dependent on plummeting sales taxes.

But House Majority Leader Kenny Bingham cited that record-high jobless rate as the reason for not increasing taxes.

"Nobody wants to raise taxes because people are struggling as it is," said the Cayce Republican.

State schools Superintendent Jim Rex said Thursday a 30-cent cigarette tax increase isn't good enough after three decades of no movement, and he will continue to push for raising it to the national average of $1.34 and temporarily giving half the money to education.

House Speaker Bobby Harrell said he expects the Senate to take the cigarette tax increase out of the budget, but hopes it nudges action on a separate bill that's stalled in the Senate.

Legislators have debated increasing the tax for several years. They approved a 50-cent tax hike in 2008, but couldn't override Sanford's veto. The House again passed a 50-cent plan last year.

The House also voted 69-43 to loan $10 million from the state's insurance reserve fund if the Heritage golf tournament on Hilton Head Island can't find a sponsor to replace Verizon, which says this is its final year as sponsor. Opponents criticized the move as helping the well-off at a time when basic services are being cut. Proponents argued the tournament — held in April following the Masters in Augusta, Ga. — supports hundreds of jobs and pumps tens of millions of dollars into the state through spectators' spending. They said the state must show its support or risk seeing the tournament go elsewhere.

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