Tuesday, May 27, 2008

No Apologies for Being Conservative

We stand at a crossroads in South Carolina as we debate the Governor's Veto of the Cigarette Tax. There are some things that the proponents of a cigarette tax are not telling you. While I firmly agree that reducing smoking is a good idea for the citizens of this state, I think a government using its power of taxation to change behaviors is a slippery slope to it using taxation to punish unpopular activities.

The argument that it will be a deterrence to underage smoking is a ruse used to gain support. If we want to be serious about underage smoking, then let us adopt policies in this state that really penalize youthful offenders.

In addition, the Bill as written is not revenue neutral. We are expanding a program that we cannot afford and we are at risk of (in subsequent years due to historical revenue reductions from this tax) 1) not being able to provide the services to those who are currently receiving them; 2) cutting programs at other agencies to pay for them; or 3) further raising taxes to pay the cost of the expanded Medicaid rolls and new welfare voucher programs.

We should be empowering the individual healthcare consumer by way of health savings accounts or, better yet, simply providing a tax refund so that citizens might make their own decisions with their own money.

This bill sets up a trap for future taxpayers. The legislation adds people to the Medicaid rolls which means, of course, that the cost of Medicaid will rise. The proposed increased cigarette tax promises, hopefully, to decrease the purchase of cigarettes in South Carolina. This means that the revenue from this new tax will decrease over time. Over a short time the revenue from the cigarette tax will fall behind the cost of the new Medicaid recipients. The only place to make up the difference will be the General Fund of the State. That reality means that this legislation actually represents a tax increase on everyone in future years and I cannot support that.

Rep. Doug Jennings stated it well: this vote is about raising the cigarette tax from our 7 cents per pack to 57 cents. Ok, I am fine with that. But let's be smarter about spending the money. Period.

If Sweden can do it..........?

Sweden's parliament has approved a government proposal to deny subsidized public healthcare services to illegal immigrants. From an article from YAHOO news:

STOCKHOLM (AFP) - Sweden's parliament on Wednesday approved a centre-right government proposal to deny subsidised public healthcare services to illegal immigrants as of July 1.

The law, which is largely a formalisation of the current practice, stipulates that clandestine immigrants and rejected asylum seekers can only receive emergency medical care if they pay for it themselves.

The parliament voted 265-33 in favour of the proposal, with the left-wing Green Party and Left Party voting against it on humanitarian grounds.

The vote was postponed by a day to allow for an extended debate.

The government plans to create a commission later this year to examine whether some groups within the categories of people who will not receive subsidised health care should be entitled to it.

All parties in parliament are, for instance, in favour of giving clandestine immigrant children the right to subsidised medical care.

Thursday, May 8, 2008

Government's Growth is "Smokin'"

The South Carolina Senate passed this week a 50 cent per pack cigarette tax increase - expected to generate $159 million annually. Where will the money go? The majority of it will go for heath care for low income residents - 50% for Medicaid and 50% to a new voucher system for the state's lowest-income residents to get private health insurance. There are a few concerns for me here:

I personally have never had a philosophical problem with a cigarette tax increase. The problems I have had, though, have been: 1. What is the state was going to use the excess revenue for? and 2. Would we be creating programs that would need recurring revenues? - knowing that the new revenues from this tax would dramatically decrease over time due to, hopefully, less people smoking as well as cross-border or internet cigarette sales.

The Senate plan, as I understand it, grows government - well - it grows welfare, too. So the state is going to chase the 3 to 1 Medicaid match with 50% of the revenues (keep in mind that historical data shows that revenues from a cigarette tax decrease after the initial surge, leveling off somewhere significantly below the revenues realized in the first couple of years). When we grow the Medicaid rolls, what will we do in future years when the cigarette tax revenue declines? That would mean taking dollars from elsewhere to fund Medicaid or, heaven forbid, cut Medicaid spending - which we will never do........

Then, the Senate plan will grow welfare by creating a voucher system for the state's poorest to purchase health insurance........hmmmmm..........So there is nothing to help small businesses provide affordable health care insurance for those employees that are gainfully employed, trying to contribute to the success of a business and are paying taxes? Or how about the guy in the middle, who is struggling to have health insurance, will probably never be eligible for Medicaid and needs a helping had if we are going to increase taxes?

Yes I am a Conservative. No apologies here for that. I am not about growing government and not about growing welfare. I may not have a problem with the cigarette tax increase - but new revenues would have to be used sensibly to help the majority of the state citizens. Give me a sensible plan and I'll vote for it. Give me the Senate plan, and I will vote against it.


In the 1967 movie "The Graduate," Dustin Hoffman's character, Ben, is given the following career advice:

Mr. McGuire: I just want to say one word to you - just one word.
Ben: Yes sir.
Mr. McGuire: Are you listening?
Ben: Yes I am.
Mr. McGuire: 'Plastics.'
Ben: Exactly how do you mean?
Mr. McGuire: There's a great future in plastics. Think about it. Will you think about it?
Ben: Yes I will.
Mr. McGuire: Shh! Enough said. That's a deal.

If the movie were filmed today - or if the book were written today, the "WORD" would not be plastics - it would be "ENERGY." The demand for energy in the future, this issues surrounding how we will acquire sources of energy and how we balance our impact on the environment will be crucial. Energy.............Energy.........

Friday, May 2, 2008

South Carolina Trade Mission

With the strength of the Euro versus the US Dollar, it is a good time for South Carolina to be courting German (and other European) businesses to our state. While on a a recent trade mission to Germany and France, Representative Mike Pitts and myself had the opportunity to meet one on one with German companies. A meeting and plant tour with Koerber in Berlin (Koerber recently announced locating a manufacturing business in Laurens, SC), we were glad to hear of a planned expansion of operations in Laurens - even though the operation is just getting underway!

I want to take the opportunity to say what a great job that South Carolina's Department of Commerce European Office is doing. From what I have seen, the Director - Ian Forbes-Jones and the Assistant Director - John Stillwell - are well respected and are doing a first class job for the state.

We attended the Hannover Trade Fair in Hannover, Germany - WOW! It is the largest in Europe and is truly hard to explain how large it is. The University of South Carolina's Hydrogen Fuel Cell research was featured and was a big part of the fuel-cell exposition portion of the energy section. Although it was USC, I was still proud to see South Carolina so well represented.

More about the energy issues I witnessed in later posts.