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Assemblyman Tom Torlakson (D-Antioch) announced today he introduced Assembly Bill 89, which could raise approximately $2 billion annually by increasing the state’s cigarette tax.
The money would go toward education, children’s healthcare and programs to help people stop smoking.
“As we confront the difficult decisions facing us during our severe budget crisis, we must look at additional revenue options as part of a balanced solution that protects the education of our children,” said Torlakson.
“This revenue stream will not only save tax payers billions of dollars currently going to treat tobacco-related medical conditions, but will also save lives by helping to prevent smoking. This measure is truly a win for California’s schools, families, as well as our budget coffers.”
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Mississippi lawmakers begin their 2009 session on Tuesday, and everything they do during their three months at the Capitol will be limited by a lagging economy and a tight budget.
"Adjusting state spending to the reality of state revenue will be a very big issue," said Republican Gov. Haley Barbour, who's beginning his sixth year in office.
Legislators will debate whether to increase the cigarette excise tax, which, at 18 cents, is currently one of the lowest in the nation.
"I think we're all in agreement that there's going to be a cigarette, tobacco tax increase," said Lt. Gov. Phil Bryant, a Republican. "So now it's about how much and where the proceeds will go."
There seems to be growing momentum in the capitol for raising Florida's 34-cent cigarette tax as one way to deal with the state's deepening finanical crisis -- but a new estimate indicates smokes might not provide the budget boost once envisioned.
A $1 hike in the state cigarette tax -- to $1.34 per pack -- is now expected to bring in $700 million in extra revenues, said Amy Baker, the Legislature's chief economist. That's down sharply from last spring's estimate that put the expected windfall to state coffers at $1 billion.
"People change their spending habits" in a recession, Baker said. "They might have bought some name brands or some sort of deluxe version of cigarettes before, but now they're going to basics, the generic cigarettes."
Even at 34 cents a pack, state revenues from cigarette taxes are declining.
Smoking is on the decline in Denmark where roughly one in four people smoke daily, a new survey published Monday said. A record number of Danish smokers also want to quit the habit, the survey said.
The findings also indicated that there is support for hiking tobacco prices - such a move was supported by 59 per cent and opposed by just 19 per cent.
In all 23 per cent of Danish nationals over 15 years of age smoke daily, totalling roughly 1 million people. In addition some 200,000 people, or 5 per cent of the population, smoke occasionally, the new survey said.
A year ago, 24 per cent of the Scandinavian country's some 5.5 million people were estimated to smoke daily.
Smoking was less prevalent among younger sections
Governor Chet Culver's resolution is to make Iowa the healthiest state in the nation, and the habit he wants Iowan's to kick is smoking. Recent studies show it may already be happening.
Governor Culver recently announced that smoking in Iowa is down 22 percent since 2006 - one of the most significant drops in any state in recent years. But some Iowa smokers are saying his anti-smoking legislation is hurting business and not convincing them to quit.
For most Iowans, getting a nicotine fix is not a part of their everyday life. But for some it's a hard habit to kick, and for one Iowa business its hard to believe that less people are smoking.
Cashier Traci Heath says tobacco sales at the Select Mart on Gordon Drive in Sioux City have been fairly steady since it opened in 2006.
"Since 2006 I haven't seen a decline at all," said Heath. "The only thing I've seen a decline on is with the new FCS law, that's the only decline I've seen."
The Select Mart on Gordon Drive has seen some of their business go across the river to Nebraska thanks to high state taxes and the new fire-safe cigarettes that Iowa stores are required to sell.
New York's excise tax per pack of cigarettes: $1.500
New York's excise tax collection for the fiscal year ending June 2007: $936,457,000
Sales tax on tobacco products: 4.00%
Tobacco products sales tax collection for the fiscal year ending June 2007: $136,362,000
Local tax on tobacco products: $227,689,500
Federal excise tax per pack of cigarettes: $0.39
Total federal excise tax collections in fiscal year 2007: $7,307,440,000
Click here for the Cigarette Tax and Payment Table for all states.
According to researchers at the University of North Carolina at Chapel Hill, the number of high school students who smoke fell from 20.3 percent to 19 percent in 2007.
That’s a significant drop. But not nearly good enough.
Imagine if one out of every five high school students in the state was diagnosed with cancer. Parents and legislators alike would be vigilant to find a cure as quickly as possible. . . .
Yet when it comes to smoking, we won’t even enact laws to protect the innocent from the deadly consequences of second-hand smoke. . . .
Government has, in a way, become a co-conspirator with the tobacco companies. Since 1998, when a settlement was reached, the states have received $203.5 billion in tobacco-generated revenues — $79.2 billion from the settlement and an additional $124.3 billion in taxes from tobacco sales. The more cigarettes that companies like Philip Morris sell, the more money the states take in.
A substantial portion of that money was intended to be used to curb smoking and to care for those already ailing from smoking-related diseases. But so far only a measly $6.5 billion, or 3.2 percent, of the funds have been used to prevent smoking. There is a fear, in some levels of government, that if smokers stop altogether, it might mean the loss of a steady source of state revenue. We’ve agreed to turn a blind eye to smokers, for a nominal fee.
Thankfully, teenagers still have that knack for spotting hypocrisy in adults. They’re on to us.
They get that nicotine is an addiction that they can live better and longer without.
Now if only our legislators would act as wisely.
In their letter in response to Franks et al.'s analysis of the failure of tobacco taxes to effectively reduce smoking among lower socioeconomic status smokers,1 Farrelly and Engelen assert that concerns about the regressivity of tobacco can "easily be addressed...by earmarking revenue from cigarette excise taxes to evidence based smoking cessation interventions targeted to low income populations with the highest smoking rates."2(p582)
This is a noble sentiment, but optimistic, given political reality. After a decade of more than 100 separate state increases in tobacco taxes and strong efforts by public health advocates, there have been few instances of such an . . . [Full Text]
The Florida tobacco tax currently is 34 cents a pack, which doesn't sound like much, but don't let that deceive you. Smokers also pay a 39 cent federal tax, along with a hidden tax disguised as exorbitant prices. The steep cost of cigarettes is the result of legal settlements with tobacco companies that brought billions of dollars into state coffers.
The alleged goal of tobacco lawsuits a decade ago was to win reimbursement for the money states paid out in smoking-related medical costs. Along the way, the lawsuits turned some multimillionaire attorneys into mega-multimillionaires, as state attorneys generals worked in cahoots with private law firms. . . .
The state-initiated lawsuits represented possibly the biggest transfer of wealth from the poor to the rich since the days of Louis XVI and Marie Antoinette, and look what happened to them.
There are several interests that would cheer an increase in Florida's tobacco tax. Among them are the Seminole and Miccosukee tribes, which would see their sales of tax-free cigarettes rise appreciably.
Organized crime also would benefit. Cigarette smuggling already is a problem. Years ago, a New York official says it was more profitable to hijack a truck loaded with cigarettes than a Brink's truck.
Given these tough economic times, don't add to the burden of police, or to the financial burdens of the state's tobacco addicts, by raising the cigarette tax.
I would like the citizens of Iowa to strongly oppose any initiatives to seize income at the local level, as cited in the Dec. 28 article, "Plan Would Give Iowa Cities Power to Tax Incomes."
Government's thirst for money has become insatiable, and it could be argued that its greed could rival that of any greedy corporation. In these trying economic, environmental and health-care times, I propose the following: Impose drastic tax increases on gasoline, cigarettes and alcohol. . . .
The cigarette- and alcohol-tax increases would help to reduce tobacco and alcohol abuse and addiction.
Gov. Tim Kaine proposes raising Virginia's cigarette tax to help balance the state budget without making further cuts in important services such as Medicaid. There are sound reasons to support such a hike. Cigarettes hardly qualify as essential; people certainly don't need them the way they need, say, medical care. Virginia has a fairly low tobacco tax. And Kaine is not trying to balance the budget on the backs of the Old Dominion's tobacco industry. The tax hike is just one part of a series of measures, including budget cuts and layoffs in the state workforce. . . .
If Virginia had used the settlement money for its intended purposes, then the governor probably would not find it necessary to shore up Medicaid funding now. So the strongest argument against raising the cigarette tax might be this question: If state leaders could not be trusted to use money from the tobacco settlement agreement as they should have then, why should voters trust them with more money from higher tobacco taxes now?
This past fiscal year, Virginia received more than $170 million in cigarette excise tax revenue, $92 million from cigarette sales taxes and an additional $133 million in payments from the Master Settlement Agreement -- nearly equaling the $400 million in annual Medicaid expenses the editorial attributed to Virginia smokers. Cigarette smokers also paid $64 million in excise taxes to local governments.
About half of the price of a pack of cigarettes sold in the state goes to the government. Increasing this burden with a higher cigarette excise tax would be unfair to adult smokers and would harm Virginia's manufacturers, tobacco growers, wholesalers, retailers and the jobs they provide.
The number of adult cigarette smokers in the United States has declined for the first time in four years, according to the Centers for Disease Control.
The CDC said tobacco use nationally has dipped below 20 percent for the first time since the 1960s, and Bill Pfeifer with the Arizona Lung Association said Arizona is following the trend.
About 18 percent of adult Arizonans smoke, but the numbers are getting better each year, Pfeifer said.
"We passed a significant tobacco tax increase in 1994 here in Arizona and really that resulted in kind of the first step to see a significant decline in tobacco use in the state of Arizona," he said.
He believes Arizona's smoking rate could fall to around 10 percent within the next decade.
v. Jim Doyle is signaling a willingness to raise the cigarette tax, a year after he and legislators raised the tax by $1 a pack.
The Democratic governor did not explicitly endorse raising the tax in a recent interview, but he noted he originally fought for raising the tax by $1.25.
"I would simply point out that I've supported going to a higher level in the past," he said.
The cigarette tax rose to $1.77 a year ago today.