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Posted on 04/20/2004 8:41:56 PM PDT by Dan from Michigan

House to take up cigarette, liquor tax increases, estate tax continuation

By AMY F. BAILEY
The Associated Press
4/20/2004, 6:52 p.m. ET

LANSING, Mich. (AP) — The state House is set to take up legislation this week that would increase the state tax on cigarettes and liquor and continue the estate tax on wealthy individuals.

Republican House leaders issued notices on Tuesday that they would discharge the three bills from their respective committees without the panels' approval. The House could vote on the bills as early as Wednesday.

Rep. Randy Richardville, a Monroe Republican who helps set the agenda for the House, said representatives want to begin working on the bills that reflect Gov. Jennifer Granholm's proposals to help resolve the $1.3 billion shortfall in the budget for the upcoming fiscal year.

"We're going to see where we are," he said.

Bills need only 55 votes to win approval in the 110-member House, rather than 56, because of one vacancy exists.

Republicans, who have a 63-46 House majority, have criticized the governor's proposals to increase the state tax on liquor and cigarettes.

Granholm's $39.7 billion spending plan for the budget year that begins Oct. 1 includes $295 million from raising the cigarette tax from $1.25 to $2 per pack. Of that, $265 million would go toward filling the gap in Medicaid, which provides health benefits to low-income residents. Much of the rest would go to smoking cessation programs.

The Democratic governor also wants to increase the state tax on liquor to raise about $32 million. The higher tax would increase the price of a $10 bottle of liquor by about 50 cents.

Business groups and several members of the House GOP have hammered Granholm's proposal to raise about $94 million by continuing to tax the estates of wealthy residents after their deaths rather than allowing the tax to end this December.

Richardville said it's likely the House will start with the estate tax and the liquor tax before leaders decide whether to take up the bill to increase the cigarette tax.

House Republicans may not like the idea of increasing sin taxes, and some have called for more spending cuts to make up the budget shortfall. But they failed to get the votes needed for several spending cuts during a marathon session last month.

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The cigarette tax bill is House Bill 5632; the liquor tax bill is House Bill 4865; the estate tax bill is House Bill 5708.

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