Smokers Face July 1 Cigarette Tax Increases

CNSNews.com ^ | 7/01/03 | Christine Hall

[kattracks]

(CNSNews.com) - Smokers in six states are paying more to maintain their habit, as of July 1: Georgia, Hawaii, New Mexico, Rhode Island, Vermont and Wyoming.

With many states facing massive budget deficits yet unwilling to scale back spending, 30 states have passed cigarette hikes since January 1, 2002 - several states more than once.

Republican governors headed more than two-thirds of those states when the tax increases were signed into law.

"The strongest conclusion we could draw from this was that states were showing that they're generally wary of raising broad-based taxes but that increasing an excise tax like cigarettes was more palatable," observed Arturo Perez, an analyst for the National Conference of State Legislatures (NCSL).

Perez noted that in 2002, 20 states raised cigarette taxes, compared to just three states that raised personal income taxes and four states that increased their general sales taxes.

There may be a reason for Republicans, especially, to be more inclined toward tobacco taxes.

"I think you can say, in general, this has been the easiest tax for people to raise, particularly for Republicans, because of how favorably many in the public look on tobacco tax increases," said Chris Atkins, a budget analyst at the American Legislative Exchange Council (ALEC).

According to the Campaign for Tobacco-Free Kids, a recent poll showed 64 percent of Oregonians, for example, in favor of a cigarette tax increase.

"We've seen Republicans in a host of states vote for a tobacco tax increase but nothing else," said Atkins. "The state that comes to mind is Georgia."

Perez reports that a sort of left-right coalition for cigarette tax increases has emerged, with health activists from the left joining forces with those opposed to sales or income tax increases.

Atkins and other analysts say that the cigarette tax increases are also the result of too few lawmakers being loathe to scale back spending increases in order to balance their budgets.

Many states' officials have pointed to higher Medicaid costs as the sympathetic culprit. But Atkins said that's misleading.

"Those states that are yelling 'Medicaid' are voting to add option services on Medicaid, above and beyond what the federal government requires," said Atkins. "They're also covering people up to 200 or 300 percent of the poverty level."

He cites Colorado, Florida and Texas as three states that have held the line on taxes. Colorado has a taxpayer's bill of rights, making it difficult to raise taxes; and the state has cut over $1 billion from its 2003 and 2004 budgets.

In Florida, Gov. Jeb Bush (R) has found savings elsewhere in the budget and enjoys a more steady tax revenue flow from a broad-based sales tax (with no state income tax).

Smokers in Connecticut and Georgia now pay more for cigarettes than any other state in the nation, $1.51 per pack.

But it's California that has the biggest state budget hole - $38 billion - after average spending increases of 9.1 percent a year between 1997 and 2002. A cigarette tax increase is but one fix in the offing; and Missouri, Nevada and New Jersey may follow suit.

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[ElectricStrawberry]

Good thing I quit back in January. Massatwoshits is way outta control concerning smoking and the taxing thereof.

[Cold Heat]

They forgot Arkansas. Taxes went up .25 cents.

[borisbob69]

...increasing an excise tax like cigarettes was more palatable...

Until the Smoker's Revolution at which point state coffers will not see the anticipated increase. Because...like prohibition, punitive taxes will drive the buyers underground and the black market, Indian Reservations and the internet will all be players. Not to mention the "roll your own" crowd!

[VRWC_minion]

Indian Reservations and the internet will all be players. Not to mention the "roll your own" crowd!

Don't hold your breath. New York is leading the pack in stopping this. Seems they are making the carriers liable thereby shutting down the shipments. Also, in CT the legislature has passed a tax (that has not been inforced yet), that taxes loose tobacco at the same rate as cigs.

[Elsie]

"The strongest conclusion we could draw from this was that states were showing that they're generally wary of raising broad-based taxes but that increasing an excise tax like cigarettes whatever was more palatable," observed Arturo Perez, an analyst for the National Conference of State Legislatures (NCSL).

Divide and conquer.........