Maine: Panel OKs $1 tax hike on cigarettes

bangordailynews.com ^ | 6-15-05

[SheLion]

Dems propose $125M in cuts

AUGUSTA - Majority Democrats on the Legislature's Appropriations Committee repealed a $250 million, budget-balancing loan Tuesday, replacing it with $125 million in spending cuts and a $1 hike in the state cigarette tax.

At $2 per pack in taxes, Maine would have the third highest cigarette tax in the country, according to Dan Riley, an Augusta-based lobbyist for the tobacco industry. The increase would effectively drive up the over-the-counter price for a pack of premium cigarettes like Marlboro from $4.19 to $5.19.

"We have selected some new revenue to bring us to the $250 million target," said Sen. Peggy Rotundo, D-Lewiston and co-chairman of the Appropriations Committee. "We cut as far as we felt we could."

Gov. John E. Baldacci said Tuesday he will support the cigarette tax increase as the best available solution to eliminating the $250 million state revenue bond included in the two-year, $5.7 billion state budget to take effect July 1. Like the 8-5 vote on the budget panel Tuesday, the state budget was advanced in March by majority Democrats who believed the $250 million loan was an acceptable alternative to deep spending cuts in state programs.

The proposal now goes to the printer, where it will be assigned an LD number. Legislative leaders essentially abandoned a planned Wednesday adjournment and anticipated debate on the new tax-and-spending package would begin sometime Thursday in the House.

Republicans on the panel have prepared their own proposal to reach the $250 million target that relies on severe cuts to state health care services and defers salary increases to state employees. The package also restores numerous proposals that were rejected by Democrats on the Appropriations Committee.

"A lot of our initiatives are about the size of state government and the costs associated with state employees," said Sen. Richard Nass, R-Acton and the senior Republican on the budget panel.

Republicans were essentially bypassed by Democrats in March when the majority budget was passed. The GOP responded by launching a people's veto of the borrowing component with the hope of overturning the provision at the ballot box in November. About 40,000 of the required 51,000 signatures have been gathered, according to Sen. Peter Mills, R-Skowhegan. In response to Tuesday's vote by the Appropriations Committee, Mills indicated final approval by the Legislature of either proposal to eliminate the borrowing provision of the budget was all that was needed to terminate the people's veto effort.

"When it looks like this has passed in the House and Senate, we'll declare victory and the signature-gathering effort will stop," Mills said.

In a closely divided House and Senate, however, such conclusions cannot be presumed lightly. Republicans and some Democrats were not sure how the majority report from Appropriations would be received by rank-and-file Democrats in the House. The Democratic plan:

. Cuts $10.4 million from mental health programs by revamping the delivery of those services.

. Saves $5.9 million by delaying school construction projects by one year.

. Cuts $2.2 million from the DirgoHealth program.

. Cuts $5.5 million from the Veterans Tax Reimbursement program.

. Cuts about $7.2 million from the Business Equipment Tax Reimbursement program.

By contrast, the GOP plan:

. Delays $20 million in state employee salary increases until the next budget cycle.

. Cuts $20 million in health care services to poor working Mainers.

. Transfers $32 million from the DirigoHealth program to the General Fund, leaving DirigoHealth with a balance of about $6 million.

. Eliminates the governor's Office of Health Policy and Finance with a $2 million deappropriation.

. Eliminates the reduction to the BETR program proposed by Democrats.

Rotundo said Democrats could not support the level of cuts Republicans wanted to make to the state's social service programs.

"In order to cut more we were going to have to get into those programs that provide health insurance for some of the poorest people in the state - the working poor," she said. "We just didn't want to go there. We did not want to remove thousands of people from programs that were providing them with some kind of health care."

[SheLion]

With a $5,700,000,000 budget, that comes to about $4,470.86 per resident. They would be better off just sending checks to every resident for $4,000.

But wait, then they wouldn't be able to employ all the useless folks in good government jobs.

That's a good link, CSM.  Thanks!

The lawmakers never ever want to cut any of their little pet programs!  And since the Rats run Maine, we will continually see this happen to the rest of us. 

I hope a good chunk of Maine smokers ARE Dems!  They will feel the heat just like the rest of the Maine smokers!

[SheLion]

It is a good one, Old Pro. And it can be applied to anyone. Not just smokers or Jews or Catholics, etc. It's the trickle down effect.

[metesky]

Don't these morons ever learn?

I'm sorry dear, but their position (you should quit, but we need the money) makes them oxymorons.
:O)

[CSM]

Don't worry to much, they'll still blame Bush.

[SheLion]

I'm sorry dear, but their position (you should quit, but we need the money) makes them oxymorons.
:O)

Makes them MORONS alright!

Tobacco Free my arze!

[SheLion]

Very good.............but there are many who will not heed the moral of the story........and many of them reside right here at FR.

Oh yes.  I keep a list of the FReeper's that hate smokers so much!  The list is up to 31 anti-smoking FReepers.  31!

And we are all supposed to be on the same side.  I guess we are unless we smoke. heh!

[Gone GF]

Deferring salary increases for state employees puts the burden on an even smaller number of people. Please explain why those folks should absorb what amounts to a tax increase for them?

[aquila48]

...$5.7 billion state budget to take effect July 1. Like the 8-5 vote on the budget panel Tuesday, the state budget was advanced in March by majority Democrats who believed the $250 million loan was an acceptable alternative to deep spending cuts in state programs.

Let's see, 250mil divided by 5.7 bils is less than 5% - how does that qualify as "deep spending cuts"? And I bet anything the budget actually increased, so probably the so-called cuts would be a cut on the increase not actual cuts.

[CSM]

Please explain what a state employee produces and what value they bring to society. Then explain how that value increases over time.

[SheLion]

Maine's high cigarette tax far from being tapped out

Wednesday, May 8, 2002- Portland Press Herald

Maine's cigarette tax - among the highest in the nation - appears to be enjoying a banner year. Generating almost $95 million in this fiscal year, it surpassed last year's total by $17 million and has now passed corporate income tax as the third-highest money-maker for the state.

The real cause for celebration, however, is that state analysts are predicting that retailers will sell 3 million to 4 million fewer packs by the end of the 2002 fiscal year than in 2001.

Not everyone thinks that's good. Some worry that state government has become too dependent on taxing bad habits, and that as smoking declines, so will revenues from cigarette taxes. The King administration argued earlier this year that Maine had reached the tipping point, where a further increase in the cigarette tax would lead to a decrease in tax revenues, as smokers kick a habit they can no longer afford.

We disagree. The Maine Lung Association says that Maine is nowhere near its tipping point . New York levies a $1.50 per pack tax and is still generating higher revenues than it did at lower tax rates.

Of course, the cigarette tax can be measured in savings, not just in tax costs. Every year tobacco products kill 2,500 residents and add $1.15 billion in health care costs. If more smokers kick the habit because of the tax, both they and the state's taxpayers win.

The greatest value of a high cigarette tax is the effect it has on young smokers. When butts cost too much, young smokers not yet dependent on nicotine will quit. Since 1997, when the state doubled the cigarette tax from 37 cents to 74 cents, Maine's teen smoking rate dropped by 36 percent.

State officials shouldn't panic over the state's heavy dependence on the cigarette tax. They should, on the other hand, remain deeply concerned about the continuing addiction to cigarettes and the cost it places on all Mainers.

And yet, the Maine lawmakers persist in continually raising cigarette taxes!

 

[Gabz]

The list is up to 31 anti-smoking FReepers.

While that is an appalling number - it pales in comparison to the number of Walmart haters........and don't even get me started on the numbers of the public school haters.

[SheLion]

........and don't even get me started on the numbers of the public school haters.

We are all fighting one group or another that just want to keep their claws into our private lives.

[Gabz]

We are all fighting one group or another that just want to keep their claws into our private lives.

Exactly.

[Gone GF]

"Please explain what a state employee produces and what value they bring to society. Then explain how that value increases over time."

In what job?

If you already think all state employees are worthless or never deserve a raise, then don't bother replying. I don't talk to brick walls.

[CSM]

Pick any job outside of law enforcement or firefighting and explain the value that they add to society. More specifically, explain how that value is provided in the most efficient manner.

[newsgatherer]

Hey, that's two bucks a pack now plus sales tax and mark up, Wish I ahd the guts to tell the boss I want to give up working for him free and go be a smuggler.

20 bucks a cartoon in tax, and here we are 30 miles or less from conway.

How many cartoons can you get in the back of a 3/4 ton pick up?

Now, I know it sounds as if I'm making light of this, but, I've got to tell you, I one time interviewed a man who was in jail for smuggling, he told me that the only things he smuggled were things folks wanted that were legal to use, like cigarettes, he made millions before he got sloppy and caught.

He got caught smuggling booze out of canada and into New York. Got two years if memory serves me. Actually it was kind of funny how he got caught. He was dragging a sled full of cases of booze across the St. Johns river with a snowmobile loaded with cases of booze when he went through the ice.

He’s out now, wonder if I can find him might be fun to put up some of his tricks of the trade, then of course, Bob would fire me. No, he can’t do that, I’m free labor.

Jake

[SheLion]

The taxing power...must not be used to regulate the economy or bring about social change."
Ronald Reagan - 1981

[Gabz]

That's a funny story.

[SheLion]

He got caught smuggling booze out of canada and into New York. Got two years if memory serves me. Actually it was kind of funny how he got caught. He was dragging a sled full of cases of booze across the St. Johns river with a snowmobile loaded with cases of booze when he went through the ice.

Got to laugh to keep from crying! hehe!

Well, if the bootleggers charged just half of the taxes that Maine lawmakers are getting, the bootleggers would be billionaires in no time, Jake!

[Gone GF]

Should we completely do away with public education (I realize some freepers feel that way; I don't)? Should all roads and highways be privatized? Airports? Should we depend on private citziens to plow Maine's roads when it snows? How will they be paid?

Should all the support positions for these things, including law enforcement, firefighting, and first aid, also be privatized? These folks don't function by themselves in a vacuum (our own military has something like 10 support people for each combat person). Do we do away with all state legislatures, which also require at least some support people?

I'm not saying all state or federal employees are necessary or valuable. They most certainly aren't. But it certainly isn't as easy as keeping every law enforcement person or firefighter and tossing the rest.