South Carolina - low cigarette pricing, smuggling, higher insurance premiums, etc..

November 23, 2009 - South Carolina (SC) offers the cheapest smokes in the nation -- a fact federal officials say will make it a magnet for black market cigarette runners. In addition, the state has the shameful distinction of having the nation's lowest state cigarette tax, at 7 cents a pack, where it's been since 1977.

New York officials say the South Carolina already is the source of cigarettes smuggled illegally into that state. For example, the sales tax alone on a pack of cigarettes in New York City is $3 compared with 7 cents in South Carolina. Rhode Island has the highest state cigarette tax in the nation at $3.46 per pack - the national average is $1.34 a pack.

Smugglers make money by buying cigarettes in South Carolina -- or another low-tax state -- and reselling them in a high-tax state for a price lower than that state's prevailing price, including its taxes. So, the difference in cost from South Carolina to New York City -- almost $30,000 for, say, 1,000 cartons -- would leave plenty of room for a hefty profit, even with the cost of transporting the cigarettes

This ease of making hefty profits is attracting some of the nastiest elements of the criminal world, federal authorities say. The reasons are simple. Profit margins are huge, the risk of getting caught is minimal, and punishment can be mild compared with penalties for other crimes. Getting a handle on the scope of the bootlegging problem is difficult, but profits from smuggling rings run into the tens of millions, federal officials say.

"It's a safer way to make illegal money than typical drug trafficking," said Earl Woodham, a spokesman for the Charlotte office of the federal Bureau of Alcohol, Tobacco and Firearms. "And the profits can be just as good, if not better, than drugs."

As a result of the low tobacco tax SC generates only about $2 million a year in state taxes. Amy Barkley, who monitors the Mid-Atlantic region for the Campaign for Tobacco-Free Kids, called the level “ridiculously low” since pricing at the high end is the most proven method of discouraging people from starting to smoke. More than 5,500 teenagers younger than age 18 pick up the habit in South Carolina every year.

Smoking during pregnancy is associated with an increased in risks of preterm birth.
March of Dimes gives SC a failing grade when it comes to premature births.

Another shortcoming, Amy said, is the small commitment by the S.C. Legislature toward funding tobacco cessation and prevention efforts. Next year the state's package will run only about $2 million — far short of the $62 million the CDC says is needed to be effective.

Maybe in 2010 the state legislature will find a way to pass a hefty increase in the state tobacco tax that the governor will sign. SC General Assembly convenes second Tuesday in January of each year maybe things will be different this time.

Starting January 1, 2010 state workers will be charged a $25 monthly surcharge on the health insurance premiums if worker or any covered family members use tobacco products or have used tobacco products within the past six months. The proposal was the idea of Governor Mark Sanford, but he actually voted against the approved measure because he did not see why the increase couldn't be imposed before the planned start date of January 1, 2010. The state budget board has reported that tobacco-related illnesses are responsible for 7 percent of the $1.1 billion spent for public employees' health care.

South Carolina appears to be doing well with local municipal efforts to curb smoking in public places indoors like the workplace, and bars and restaurants, Amy said. On March 31, 2008, the South Carolina Supreme Court unanimously ruled that local governments have the right to enact and enforce smokefree laws. About 30 local governments in South Carolina have adopted a ban since May 2006, when Sullivan’s Island led the move to outlaw smoking in workplaces. (Cities/Counties South Carolina Smoking Bans, Latest Could Be Rock Hill)

Reference: State's anti-smoking approach draws criticism amid rising rates by Schuyler Kropf - The (Charleston) Post and Courier 11/22/2009 The Herald - Rock Hill, SC

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