From: bill@smokescreen.org
Date: Wed, 02/28/07
Unlike the FDA tobacco legislation in US Congress (which is a negotiated
backroom deal between Philip Morris and CTFK), cigarette tax hikes (and
smokefree workplace laws) have proven effective in reducing youth smoking.
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States consider tobacco tax hikes
Health coverage would expand
By Richard Wolf
USA TODAY
February 27, 2007, page 1A
http://www.usatoday.com/printedition/news/20070227/1a_lede27.art.htm
More than a dozen states are considering higher tobacco taxes this year, most
often to help millions of uninsured people get health coverage.
Four of the most closely watched proposals call for tax hikes of $1 per pack or
more, an increase attained by only four states in the past. Wisconsin Gov. Jim
Doyle wants a $1.25 increase. Iowa, Maine and Maryland are considering $1.
The number of tax hike efforts isn't unusual: 21 states boosted tobacco taxes in
2002 and 17 in 2003 to combat the recession. Many of the new proposals are
noteworthy for their size and link to helping some of the nation's nearly 47
million uninsured people.
"The amounts you're seeing are larger than we've seen in recent years," says
Harley Duncan of the Federation of Tax Administrators. Expanding health
insurance, he says, is an "expensive proposition."
Forty-two states, the District of Columbia and Puerto Rico have increased taxes
since 2002 - 10 of them more than once, says the Campaign for Tobacco-Free Kids.
Since 2000, tobacco sales in the USA have declined 15%, falling more steeply
(27%) in the 19 states and the District of Columbia that tax cigarettes at $1
per pack or more, industry data show.
Taxes are rising in six states this year, pushing the average price of a pack of
brand-name cigarettes to $4.26, up from $1.95 a decade ago, according to the
economic consulting firm Orzechowski and Walker.
State tobacco taxes range from 7 cents a pack in South Carolina to $2.58 in New
Jersey. They raised $14 billion in 2006, up from $7.3 billion a decade earlier.
The 39-cent federal tax, last increased in 2002, raised $7.5 billion last year.
Industry officials say taxing tobacco to fund statewide initiatives is
discriminatory. "It's asking one small minority group to fund a program to
benefit the entire state," says Steve Kottak of R.J. Reynolds Tobacco. "Our view
is, the smokers have paid enough."
Many states link tobacco taxes to helping people who don't have health
insurance:
- In Wisconsin, Doyle wants to help insure 185,000 of 250,000 uninsured
residents.
- In Oregon, where Gov. Ted Kulongoski has made this a top priority, Democrats
must win five Republican votes in the House next month. The goal is to cover
most of the state's 117,000 uninsured kids.
- In Maryland, state House leaders want to double the state's $1 tobacco tax and
help nearly one-third of the state's 780,000 uninsured.
Iowa Gov. Chet Culver wants a $1 boost to close the gap between $100 million
raised from the existing tax and $277 million spent on smokers' health care.
Tax proposals have been made in at least 19 states this year, although some are
not likely to pass. There are, however, a dozen advanced by governors.
http://www.usatoday.com/printedition/news/20070227/a_tobaccotax_box27.art..htm
(page 4A)
Governors in the 12 states below have proposed tobacco tax increases this year
ranging from 5 cents to $1.25 per pack. Proposals in at least seven other states
lack governors' support and have less chance of becoming law. Story, 1A.
State Current tax Proposed increase Where increase would go
Conn. $1.51 $0.49 Education
Del. $0.55 $0.45 Health care/insurance
Ind. $0.55 $0.25 Health care/insurance
Iowa $0.36 $1.00 Health care/insurance
Maine $2.00 $1.00 Balance the budget
Mich. $2.00 $0.05 Human services
N.H. $0.80 $0.28 Health/human services
Ore. $1.18 $0.845 Health care/insurance
Pa. $1.35 $0.10 Health care
S.C. $0.07 $0.30 Income tax reduction
Tenn. $0.20 $0.40 Education
Wis. $0.77 $1.25 Health care/insurance
Sources: Federation of Tax Administrators; Campaign for Tobacco-Free Kids;and
USA TODAY research
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