SC Democratic gov hopefuls say cigarette, car sales tax increases could help mend budget holes

Two of the three Democrats who want to be South Carolina’s next governor would use tax increases to help ease a looming budget crisis. The third says the fix is simple: Simply allow video poker to return and tax it.

State Sen. Robert Ford says he wants to fix the budget with gambling. State Education Superintendent Jim Rex and state Sen. Vincent Sheheen say the state should consider tax increases such as raising the sales tax cap on cars.

The three candidates in the June 8 primary want a chance to replace term-limited Gov. Mark Sanford. Four Republicans are running in the GOP primary. All seven candidates offered their thoughts on state spending and taxes during a series of interviews with The Associated Press.

No matter the winner, already tough budget problems are expected to loom larger by the time Sanford leaves office in January. Lawmakers say the state could have as much as $1 billion spending gap as federal bailout cash disappears.

Rex, like many Republican counterparts, says the state needs broad tax reform. He has called for a tax law overhaul that includes reviewing $2.7 billion in sales tax breaks and tax exemptions and assails state lawmakers for failing to consider changes during a “halftime” when the economy was better.

“You’d think in the locker room we would have gotten our act together. Well, right now, I don’t see us doing anything in the locker room getting ready for the second half without the stimulus money,” said Rex, a 68-year-old former college president living in Winnsboro.

Sheheen, a 39-year-old Camden lawyer, said fixing a budget as it loses stimulus cash should begin with starting from scratch when considering agency spending. He has pushed efforts for years to reform how lawmakers write budgets so it is more clear what agencies actually do with taxpayer money. “It’s purely structural, but it will make a substantive difference,” Sheheen said.

Both politicians said they see the need to raise some taxes and both want the state’s cigarette tax raised to the national average, which is $1.42 a pack. Two weeks ago, the Legislature overrode Gov. Mark Sanford’s veto of a 50-cent increase, finally ending the state’s position as the nation lowest cigarette tax a pack.

Rex said he would use half the money generated in the first two years for public schools. Later, that cash would go to Medicaid programs, Rex said.

The state’s $300 sales tax cap on cars, boats and airplanes needs to change, too, Rex and Sheheen said.

Rex said it exemplified the need to examine those tax breaks. “Some of those caps, some of those tax exemptions makes sense. Some of them made sense 30 years ago when they were put in place, but they don’t any longer,” Rex said. Ultimately, Rex said, specific taxes may be lower, but affect more goods.

Sheheen said he would change the car-tax break so that the people buying less-expensive vehicles may pay nothing, but the tax would rise as they spend more.

Rex said he’d also consider raising the sales tax on gasoline. “Everything has to be on the table,” he said.

Ford’s outlook on the state budget is much simpler. He considers his candidacy synonymous with bringing gambling back to South Carolina and believes that would solve nearly every financial issue.

“I want people to vote for me because of one reason: because they’ve got to agree that video poker could help save this state’s budgetary problems,” he said.

South Carolina outlawed video gambling in 2000. Ford believes bringing it back would generate $1 billion in taxes and also proposes selling a Myrtle Beach casino license for $1 billion.

Ford, a 62-year-old, five-term Charleston lawmaker, says increasing gambling opportunities in South Carolina will draw money from tourists and monied residents and said typical state residents don’t play video poker because it’s “too complicated.”

And budget cuts? “We don’t have nothing to cut,” Ford said. “I’m not into that. That’s the tea party people and the Republican conservatives — and Vince,” the 62-year-old, five-term Charleston lawmaker said of his primary opponent.

Sheheen and Rex said they don’t support allowing video gambling to return.

source: canadianbusiness.com

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