Smokers' Habit Feeds State Treasuries
Need more money? Try soaking smokers.
That's the message wafting through state capitols these days as budget-challenged state lawmakers look for additional revenue.
"State cigarette taxes have taken off in the last year-and-a-half or so as state budgets have been increasingly running into the red," said Pete Fisher, spokesperson for the Campaign for Tobacco Free Kids.
Since January of 2001, eleven states -- Connecticut, Illinois, Kansas, Maine, Maryland, Nebraska, New York, Ohio, Rhode Island, Utah, Washington and Wisconsin have increased cigarette taxes, according to the National Conference of State Legislatures.
More states are slated to follow soon.
On Monday, June 10, the Louisiana legislature passed a 12-cent per pack tax increase, with the proceeds going to anti-smoking programs and raises for state troopers. Gov. Mike Foster (R) is expected to sign the measure.
Vermont Gov. Howard Dean (D) is weighing a 75-cent per pack tax increase passed by the legislature.
And Hawaii's legislature recently approved a 20-cent per pack tax increase now awaiting Gov. Ben Cayetano's (D) signature that will bring the state's total tax to $1.20 per pack.
"Every year we've seen increases. But this is the first year we've seen such a high volume. And there you can attribute it to the budget problems," said James Cox, tobacco tax analyst at the National Conference of State Legislatures.
Of the more than 40 states beset by budget woes, at least thirty of them have mulled cigarette tax increases, said Cox.
Such widespread tax increases are rare for an election year, but Fisher of Tobacco Free Kids says cigarette taxes are more politically palatable than other tax and fee increases.
"This is a win, win, win situation," he said. "First, you raise revenue, which is something the states really need right now. Second, you have a whole series of public health benefits that result. Third, this is politically popular."
Try telling that to Cerie Rowland, the mother of Connecticut Gov. John Rowland (R).
Seventy years old and a pack-a-day smoker, Rowland lead her eight-member bridge club in a campaign against her son's proposal to raise Connecticut's cigarette tax from 50 cents to $1.11 per pack.
"Why pick on us?" she asked, according to the Associated Press. "It's absolutely illogical."
The governor's mom complained that the tax on other forms of tobacco, such as pipes and cigars, was not slated for an increase. Her son, the governor, is known to enjoy an occasional cigar.
Gov. Rowland won this fight the state's cigarette tax increased by 61 cents on April 3 but his victory came with a price. Rowland now buys all his mom's cigarettes on the condition that she stop speaking out against the tax increase.
Resistance like that put up by Rowland's mom is rare. Few smokers seem willing to band together into citizen lobbying groups. Tobacco companies, however, have been consistent opponents of cigarette tax increases.
"There's a very good argument to be made that adult cigarette smokers are paying more than their fair share of taxes," said Tom Ryan, spokesperson for Philip Morris USA. "Cigarettes are among the highest taxed consumer goods available. About half the cost [of a cigarette pack] goes to states and federal and local governments."
Ryan adds that cigarette taxes can be regressive, adversely affecting the pocketbooks of poor smokers.
"The cigarette tax, like most excise taxes, falls on those least able to pay it," he said.
Philip Morris and other tobacco companies have found widespread success in fighting cigarette tax increases in only one region of the country the tobacco belt, which stretches from Virginia through West Virginia and Kentucky, and includes Georgia and North and South Carolina.
Tobacco taxes in these states are among the lowest in the country and they figure to remain that way.
Virginia's 2.5-cent tax, for example, is the lowest among the states. And despite a significant budget shortfall, two recent proposals to increase the tax were rejected by lawmakers.
Virginia House Del. Jerrauld Jones (D) suggested in February that lawmakers should consider raising the state's cigarette tax to 50 cents. But his suggestion came late in the budget process and no formal proposal was attached to the budget.
A few days later, the Virginia Senate rejected a plan to raise the cigarette tax by 1 cent, which would have made Virginia's tax the 49th lowest among the states, barely passing Kentucky's 3-cent per pack tax.