The tax increase on tobacco last week prompted a record number of smokers to reach for the phone rather than their cigarettes.
Tobacco tax rose 10% from midnight last Wednesday, raising the price of a packet of 20 cigarettes by about $1.

Further 10% increases will go through on January 1 next year and January 1, 2012.

Loose tobacco was hit with an immediate 14% increase to bring it into line with cigarettes.

Quit Group senior communications adviser Chris Pitt said the tax increase was “the kind of trigger a lot of people needed” to quit smoking.

Quitline received a record 860 calls and 395 website visits on Thursday.

“We spoke to more people in one day than we ever have before,” he said.

Three times as many registrations than usual took place between Thursday and Sunday, with 2500 people registering for the Quitline programme.

Traffic volumes were expected to level-out but the response had been great, he said.

The programme had a 21% success rate, as it took an average of six attempts to quit, compared with a 4% success rate for going “cold turkey”.

“Although it’s becoming more expensive to smoke, it’s never been cheaper to quit,” Mr Pitt said.

Mornington Pharmacy intern pharmacist Jason Burgess had noticed a “slight increase” in the number of people coming in for assistance with quitting.

Some people he had spoken to credited the tax increase with pushing them to give quitting another go.

High-strength patches and gum, which were Government-subsidised, were popular, he said.

Unichem Knox Pharmacy pharmacist and owner Trudy Scott-Walker said the pharmacy had been busy during the past month with customers wanting to quit smoking but the tax increase had not made a significant impact.

Other pharmacies contacted had also not noticed any change in the number of customers want to quit smoking.

By Ellie Constantine, Otago Daily Times

Area stores unhappy with tax-free sales of cigarettes by the Oneida Indian Nation have found a powerful ally — one of the world’s largest tobacco companies.

“The state loses revenue. Retailers lose sales. Their employees could even lose jobs. And it adds to the burden on hard-working taxpayers,” reads a recent full-page advertisement paid for by Altria Client Services on behalf of Philip Morris USA. The ad was published in various Upstate New York newspapers.

The ad pictures large hands cradling sand, with grains falling between the fingers.

Oneida Nation officials say they feel betrayed by the stance Philip Morris has taken – saying it’s a reversal of the company’s previous position, which in the past has provided racking and signage to SavOn and other Indian stores.

“They were like a big brother almost, who has turned around and smacked us for some reason,” said Bob Hilburger, director of business development for the Oneida Indian Nation.

Tobacco industry officials say the ads and the website, Enforce The Law – Collect The Tax Coalition, are not questioning the sovereignty of Indian nations such as the Oneidas, who have built a commercial empire in the western portion of Oneida County and in eastern Madison County, complete with a casino, hotels, restaurants and convenience stores.

“It’s really about the policy issue of tax collection,” said David Sutton, spokesman for Philip Morris USA. “It’s about leveling the playing field.”

‘Need for revenue’

There have been several similar coalitions formed throughout the years to peddle the same kind of message, said James Calvin, president of the New York Association of Convenience Stores.

Why does Calvin hope this one will have better results?

For one, he said, the effort now has “the leadership and participation of Altria,” which sells close to half of U.S. cigarettes.

Also, the state has a vested interest to collect these taxes now to close its potential $9 billion budget gap, Calvin said.

The sale of untaxed cigarettes from Indians to non-Indians has been a longstanding issue – especially in Upstate New York.

The initial promise to collect those taxes on Indian cigarettes was made by then-Gov. George Pataki, who pulled back from the measure in the 1990s after about 1,000 members of the Seneca Nation blocked the Thruway and other roads — sometimes with burning tires.

Gov. Eliot Spitzer campaigned for governor on the same promise, but backed away once in office, leaving a gap in the 2007-08 state budget.

Now, Gov. David Paterson is giving collecting the revenue another shot, looking to enforce a law he signed in December 2008 in Utica.

Recently proposed state regulations would limit the quantity of tax-free cigarettes that may legally be supplied to Indian nations or tribes.

‘Death notice’

But the longer this tax goes uncollected, the more it is hindering local convenience stores, Calvin said.

“You lose the sale of cigarettes, and you lose the sale of other products,” he said.

Sutton said his company is looking out for the interests of such stores.

“If you have one pool of retailers that we’re obviously working with every day, and have another pool of retailers who are not colleting the tax, it’s very difficult to compete,” he said.

As for the Nation, it has already made the decision to downplay product placement of Philip Morris’ Marlboro cigarettes in SavOn stores, Hilburger said.

“Obviously you’re not going to support someone to run expensive ads in the paper,” Hilburger said, adding of the advertisement, “It almost looked like a death notice. It was 85 percent black.”

By JENNIFER FUSCO, Uticaod

Georgia lawmakers, health-care advocates and business leaders are united in opposing a proposed “bed tax” on hospitals to shore up a financially struggling Medicaid program.

What they don’t agree on is where to find $247.8 million to replace the revenue the tax would raise, money Gov. Sonny Perdue is counting on to help balance a recession-ravaged fiscal 2011 budget.

“There’s no consensus on what to do to fill the hole, it’s so big and bad,” said Rep. Ben Harbin, R-Evans, chairman of the House Appropriations Committee. “Medicaid is in such bad shape, we’ve got to come up with revenue for that.”

The governor is recommending a 1.6 percent tax on hospitals’ net revenue to help plug a projected $506 million Medicaid shortfall driven by growing demand for services and the impending loss of federal stimulus funds.

Rhonda Medows, commissioner of the Georgia Department of Community Health, gave lawmakers an either-or choice last month: approve the bed tax and accompanying fees on managed-care organizations or slash Medicaid reimbursements to all health-care providers by 16.5 percent.

But opponents see that as a false choice. Rather than offsetting the bed tax revenue with spending cuts, they would prefer to replace it with other taxes, more aggressive tax collecting or with savings from other areas of the Medicaid budget.

One possibility is raising Georgia’s tax on cigarettes and other tobacco products.

Perdue pushed a 25-cents-per-pack increase in the tax through the General Assembly in 2003 during a milder recession than the current downturn. That brought the tax per pack to 37 cents. Now, health-care advocates are calling for an additional $1-per-pack tax.

Kevin Bloye, spokesman for the Georgia Hospital Association, said there’s logic in scrapping a tax on hospitals and replacing it with a higher tobacco tax because smoking contributes to health-care costs.

“Why are we taxing organizations that make us well and not products that make us sick?” he asked.

Bert Brantley, a spokesman for Perdue, said the governor considered raising the tobacco tax when he developed his budget recommendations late last year.

But Brantley said a higher tobacco tax would have diminishing returns for the state because it would reduce smoking and, thus, tobacco tax revenue. “You end up collecting less than anticipated because demand goes down,” he said. “That’s good public policy, but you end up with a hole.”

Harbin said the only way to sell a tobacco tax hike to a tax-averse legislature would be through tieing it to health care. But he said he’s not convinced that argument would sway enough lawmakers.

While the tobacco tax doesn’t appear to be gaining traction, legislative leaders are giving a better reception to bringing in more tax revenue by giving the state more tax-collecting tools.

The House version of the amended fiscal 2010 budget includes $342,000 to hire more investigators and auditors for the Department of Revenue.

Also, House Republican and Democratic leaders have introduced bills to let cities and counties share information with the state agency, making it easier to identify and go after businesses that aren’t remitting sales taxes to the state.

“(Consumers) are paying the taxes, but they’re not being collected. We’re talking about cheating,” said House Minority Leader DuBose Porter, D-Dublin, chief sponsor of the Democrats’ bill. “It (also) would ease the pressure in this budget.”

But Brantley warned that relying on a sales tax crackdown would be risky because it’s uncertain how much additional revenue could be collected.

He said there’s also no guarantee that additional sales taxes brought in through more aggressive collecting would go toward Medicaid and not other cash-strapped state agencies.

Proposals put forth by the Georgia Chamber of Commerce would directly affect Medicaid because they would generate savings inside the program.
Chamber President George Israel, a former managed-care industry executive, said more serious efforts to prevent Medicaid fraud and abuse could save the state $100 million.

Israel also suggested big savings could be had if the Department of Community Health got more aggressive with its disease management programs.

“Seventy to 80 percent of the cost (of Medicaid) comes right out of chronic disease,” he said. “They haven’t exhausted the options.”

In response, the Department of Community Health issued statistics showing that the agency’s Medicaid fraud-and-abuse program has generated millions in savings in recent years.

Brantley said a key advantage to the hospital tax is that the revenue would be plowed back into the Medicaid program.

He also noted that the state revenue would be matched by larger drawdowns from the federal government.

Because of that federal match, hospitals serving large numbers of Medicaid patients – including Atlanta’s Grady Memorial – would be net gainers.

The hospitals that would lose money typically have more paying patients.

by Dave Williams, Atlanta.bizjournals

Boise Democratic Sen. Elliot Werk wants to charge all stores selling tobacco products $150 a year to cover the cost of checks to make sure they aren’t selling cigarettes to underage buyers. Currently, stores can get a free permit from the Department of Health and Welfare (DHW) to sell tobacco products. Maintaining those permits and performing annual checks at every tobacco seller in the state costs DHW and the Idaho State Police (ISP) close to $300,000 a year.

Werk’s proposed fee on permits would cover those costs. “It’s only to recoup costs,” he said. “It’s not to be a profit center.” DHW would set the fee for tobacco stores, but said it should be about $150. Currently, money for the tobacco permits and store checks come from the general fund and the Idaho Millennium Fund. Werk said lawmakers should shift the burden onto stores. “I don’t believe that the taxpayers of the state should be picking up the cost of the annual permits or the inspections that are required,” he said. “Taxpayers are actually paying to support tobacco dealers.”

The Senate Health and Welfare Committee approved introducing the proposed fee. Sen. Joyce Broadsword, R-Sagle, opposed the plan because it may not apply to stores selling tobacco on Indian reservations. Sen. Denton Darrington, R-Declo, also said he may oppose the plan in a full hearing because it could add another fee to convenience stores.

The committee also approved introducing Werk’s proposed ban on dissolvable tobacco. The new form of tobacco, which puts nicotine in flavored strips and mints, isn’t currently being marketed in Idaho, but Werk said ads he’s seen from other states target dissolvable tobacco to children, which could prove harmful. “They do deliver enough nicotine that it could be deadly, potentially, to very small children,” he said. The flavored dissolvable tobacco strips and pieces don’t require spitting and product labels say they can cause mouth cancer. The proposal would allow people to buy dissolvable tobacco with a doctor’s prescription. The Joint Millennium Fund Committee endorsed the proposed ban during its meeting last week.

The Senate Health and Welfare Committee will need to hear both of Werk’s proposals again before they can move forward.

By Brad Iverson-Long, Idahoreporter

Boston, Massachusetts February 1, 2010 – Massachusetts Governor Deval Patrick submitted a $28.2 billion state budget for fiscal 2011 last week. To partially offset the three percent increase over 2010, Patrick’s budget proposal calls for raising the current 30 percent excise tax on cigars and smoking tobacco to 110 percent and 120 percent, respectively. The International Premium Cigar & Pipe Retailers Association respectfully disagrees with this strategy.

“It’s outrageous to put the burden of budget management on the backs of cigar smokers. They ought to be finding jobs instead of creating job-killing new taxes,” said Chris McCalla, legislative director of the IPCPR.

The association represents some 2,000 members, most of whom are small business owners of mom-and-pop neighborhood cigar stores along with premium cigar manufacturers and distributors of related merchandise. Nearly 40 of those members reside, work and run their businesses in the state of Massachusetts.

McCalla pointed out that studies prove that higher taxes on tobacco products like premium cigars never produce the revenues they were designed to bring in. In fact, he said, they result in lower sales which cost jobs, closed businesses, and significantly reduce the very tax revenues for which they were originally created.

“When tobacco taxes go up, especially those on discretionary products like premium cigars which are enjoyed only occasionally, consumers will find less expensive sources for their favorite cigars. They will turn to the Internet and mail order as well as go across state borders or even resort to buying bootlegged products. That creates a lose-lose situation: neighborhood cigar retailers lose sales and the state loses all that tax revenue,” said McCalla.

According to McCalla, tobacco taxes are regressive and disproportionately burden lower- and middle-income earners, even among premium cigar smokers.

“Tobacco taxes also tend to be unreliable and unsustainable sources of revenue and don’t result in real budget fixes. They hurt local businesses and the overall economy. The unintended consequences for individual states and the American society as a whole can be avoided with application of sound fiscal policies and real budget reforms instead of bad tax policy,” McCalla said.

Gov. Mark Parkinson called on his fellow Wichita State University alumni Wednesday to support his call for increases to sales and tobacco taxes to preserve the university’s programs through the recession.

Parkinson said he is confident that the recession will end, and when it does, Wichita in particular will be poised for a comeback because of pent-up demand for aircraft.

But he said he’ll need lobbying help in Topeka from WSU alumni to preserve what the university has built over the years.

The state is facing about a $400 million shortfall; Parkinson has proposed a three-year, 1 percentage-point sales tax increase, a 55-cents-a-pack tax increase on cigarettes and quadrupling the tax on other tobacco products.

The state has cut roughly $1 billion from what was about a $6 billion budget and any further cuts will do long-lasting damage to colleges and universities throughout the state, the governor said.

Compounding the problem for Wichita is that the other state universities are the dominant political and economic interests in the relatively small cities where they are based, he said.

“In every other community in this state that has a major university — K-State, KU, Hays, Pittsburgh, Emporia — probably because of the size of those communities, their legislators are committed every session to doing everything they can for that university,” Parkinson said. “They view that as their job.

“Probably because Wichita is a much larger city and has a lot of other interests, we don’t have that same kind of undying loyalty from every member of the Wichita delegation.”

Parkinson lauded the school’s commitment to teaching aerospace engineering and entrepreneurship, which is difficult for other universities to match because of Wichita’s historic roots in those fields. And he encouraged university officials to continue working to expand the university’s fledgling dental education program into a full dental school, something Kansas does not now have.

With general state support flagging, universities like WSU will need to build endowments to eventually take up the slack in their budgets, he said.

Programs like dentistry that lead to high-income careers will be increasingly important because “it’s hard for an endowment association to raise money if you don’t have rich alumni,” Parkinson said.

For now, WSU will have to work hard at the Statehouse to protect its share of revenue, he said.

He acknowledged that the Legislature hasn’t warmed to his tax plan — it didn’t get even a courtesy introduction in the Senate last week — but he said he thinks lawmakers will eventually come around when they see the impact of further cuts.

“I’m encouraging you to contact your legislator and say… we love you coming to our basketball games and our plays and our music events, but what we would really love is if you would help us out on our budget, because we’re going to need some help from Topeka,” he said.

In agreement was Jim Rhatigan, namesake of the Rhatigan Student Center where Parkinson spoke.

Now retired, Rhatigan was a dean and vice president of the university, where he worked from 1965 to 2002.

“People don’t realize when you cut something, it doesn’t show up the next year,” he said. “It’s much later when you see it happen.

“When you lose your top people, who are mobile, and your infrastructure starts to crumble, you’ll know.”

Patricia Rhea said she isn’t looking forward to paying more taxes, especially since she was cut from full- to part-time after nine years at the Wichita-Sedgwick County Historical Museum.

She said she thinks a tax increase of some kind is necessary, although she’d like to see property or income tax increases considered along with the sales tax Parkinson proposes.

But, she added, “the way he has laid it out for us, it seems to me that (sales tax) may be our only option.”

Summit County Council wants to seek a special cigarette tax to raise money for local arts and cultural organizations.
Council on Monday night passed a resolution asking the Ohio General Assembly to amend state law to allow the county to place the tax before voters.

The details, including the amount of the tax, haven’t been worked out and the proposal faces many hurdles before it even would appear on the ballot, County Executive Russ Pry said.

He requested the resolution based on lobbying from the arts community. But he declined to say whether he would support the tax itself without knowing the amount and how the revenue would be distributed.

He said the tax could support financially struggling organizations such as the Akron Art Museum, Akron Civic Theatre and the All-American Soap Box Derby.

This isn’t the first attempt to levy a local tax on cigarettes for arts and culture. The council created an arts and cultural district in 2005 in anticipation of the state allowing counties to seek the tax.

But state lawmakers ended up limiting that power to counties with a population of 1.2 million or more — making it a possibility only in Cuyahoga County. In 2006, Cuyahoga County voters approved a 1.5 cent per cigarette tax to support arts and culture. It is expected to raise $20 million for 20 years.

”To be a great community, you need vibrant arts,” Summit Councilman Frank Comunale said. He added that the arts are an ”economic development tool.”

Councilwoman Gloria Rodgers questioned why the tax would be only on cigarettes. Why not alcohol and pop, she asked.

”Everything is put on the backs of smokers and I think we need to spread it out,” said Rodgers, a nurse who noted she doesn’t advocate smoking.

In other business, council:

• Eliminated the $20 a day given to residents for serving jury duty in Common Pleas Court. The move — expected to save up to $250,000 a year — will be in place for at least the next three years.

Instead of paying jurors, the court will offer free parking. About 6,000 to 7,000 people a year serve as jurors.

The cost-cutting measure takes effect this month.

Summit is now the largest county in Ohio that doesn’t pay jurors. But it isn’t the only one: Stark and Hancock counties also do not pay them.

The change affects only petit jurors and not those serving on grand juries, which meet for longer periods. Most petit jurors serve only two days or less, officials have said.

The common pleas judges suggested cutting the pay, saying the court either had to stop reimbursing jurors or possibly lay off workers.

• Agreed to allow Mary Ann Kovach, chief counsel in the prosecutor’s office, to be rehired part time after she retires in December. She will return at the end of March and could collect her government pension and a county paycheck, a common practice referred to as ”double dipping.”

She will be paid $53.16 an hour. Her current annual salary is more than $110,000.

The prosecutor’s office has said there is no one at the office who can replace Kovach, who has more than 30 years’ experience.

• Approved a resolution supporting Twinsburg’s application for a $250,000 Economic Adjustment Assistance grant through the federal Economic Development Administration. The city wants to use the grant to help develop a strategic response to the upcoming closing of the Chrysler stamping plant.

By Rick Armon
December 01, 2009

NEW YORK — Less than two weeks after New York Gov. Paterson expressed his desire to collect excise taxes from sales of cigarettes on Native American reservations, J.C. Seneca, co-chairman of the Seneca Nation Foreign Relations Committee, and Robert Odawi Porter, senior policy advisor and counsel, urged the New York Senate Committee on Investigations and Government Operations this week to honor Indian treaties as they relate to collecting taxes on Native American tobacco sales within the nation’s borders.

Addressing the hearing panel, Seneca said the recurrent question of “‘Why doesn’t the state collect taxes on commerce taking place on Indian lands?” has a simple and definitive answer: It lacks the authority.

“For over 200 years, New York State has tried to steal our lands, assert jurisdiction over what lands we have left and impose its taxes on us and our activities,” Seneca said in a statement during a hearing on the issue. “In response, and in our defense, the United States promised to protect us from any effort by the state to impose its taxes in our territories.

“Your oaths of office require you to uphold American laws and treaties. Whether you do so or not is up to you, but I assure you that we have no intention of compromising any of our treaty rights that have already been bought and paid for through the relinquishment of most of our aboriginal rights.”

The Seneca leader detailed the Seneca Nation’s effort to build its economy across its five Western New York sovereign territories, which the nation says contributed more than $1.1 billion to the statewide economy in the past decade.

The Seneca nation is the fifth-largest employer in Western New York, providing jobs for some 6,300 persons through its government, gaming and hospitality, gasoline and tobacco retailing and emerging private sector ventures, the group said in a statement. Hundreds of those jobs are held by non-Senecas.

Seneca told the panel the nation’s tobacco and motor fuel business segment, which generated an estimated $313 million in 2007, contributed nearly $200 million in spin-off dollars to the state economy.

“Even though the nation’s tobacco trade is not subject to state taxation, the ripple effects of the nation’s trade spill into the state and regional economy as the Seneca government and citizens spend net tobacco profits in the off-territory economy,” Seneca noted.

According to a recent study by Harvard economist Jonathan Taylor, Seneca tobacco sales in 2005 generated $195 million in state gross domestic product. The study concluded that for every $1 of gross profits accrued to the nation’s tobacco businesses, the state economy gained $1.67, the nation said in a statement.

The Seneca leader also detailed the nation’s efforts to oversee and control sales and distribution of tobacco products. In addition to voluntary reviews from the federal Bureau of Alcohol, Tobacco and Firearms Enforcement, the nation has implemented an anti-counterfeiting stamping program. The nation also established its own tobacco business enforcement commission, which oversees compliance to retailer authorization and minimum pricing regulations, and a ban on sales to minors.

October 28, 2009

The United States needs a healthcare sweet spot — a way to raise revenue for needed programs now and a way to lower healthcare costs in the future. Taxes on sugar-sweetened beverages — those with added sugar, high-fructose corn syrup or so-called fruit juice concentrates — would answer that need, and California could be the test case that proves it once and for all.

There is arresting logic to the numbers. There are already minor surcharges on soda in many states — fractions of a cent per ounce in most cases. That’s not enough. What’s needed is a penny per ounce added to the cost of sugary beverages. That amount would raise about $150 billion nationally over the next 10 years; in California, it would raise $18 billion. At the same time, the reduced consumption of soft drinks produced by a penny-per-ounce national tax would have direct health benefits, estimated to be at least $50 billion over the decade. This $200 billion could make an enormous difference in addressing the nation’s mounting healthcare costs.

The average American drinks 50 gallons of sugared beverages annually. Once dominated by a few flagship beverages such as Coke and Pepsi, the marketplace has exploded into a wide array of fruit drinks, sweetened teas, energy drinks, sports drinks and other versions of sugar water. But two companies still reign: Together, Coca-Cola and PepsiCo control three-quarters of the world beverage market.

Sugared beverages are marketed with fierce precision, using sports stars and other celebrities and promising benefits ranging from increased energy to better memory. Product placements in television shows, such as Coca-Cola on “American Idol,” expose vast numbers of children to hidden marketing. Portions are also an issue — the 8-ounce bottle of the 1950s has morphed into a 20-ounce behemoth. A regular 20-ounce soda contains 17 teaspoons of sugar and 250 calories.

The consequence? By the mid-1990s, per capita consumption of sugared beverages surpassed that of milk for children. Americans, including children, consume about 170 calories per day from these products, enough to have contributed substantially to the obesity epidemic and, independent of body weight, caused many cases of diabetes and heart disease. A recent study by UCLA and the California Center for Public Health Advocacy showed that 41% of California children drink soda every day, and that adults who drink soda are 27% more likely to be overweight or obese.

The industry has launched an all-out assault on “soda-pop taxes.” Beverage companies and their front groups claim that it is unfair to pick on soda when there are many factors contributing to obesity.

However, the scientific evidence linking sugared beverages with weight gain is stronger than for any other food category. Also, sugar in liquid form seems unique in its ability to slip past the body’s calorie-detecting radar, perhaps because throughout evolution, the only beverage humans drank in large quantities beyond infancy was water. In other words, when you drink soda, you don’t feel as full as if you were eating solid food, despite how many calories you’re taking in. In addition, conventional sugared beverages lack fiber, antioxidants and other protective nutrients that might mitigate the adverse effects of their essentially empty calories on health.

The industry also claims that a beverage tax would hurt the poor (the same argument was used by tobacco companies to fight cigarette taxes). But as with tobacco, the poor are most hurt by diseases such as diabetes and obesity and stand to benefit the most from programs that could be supported by tax revenues. What’s more, the average family could save several thousand dollars a year by cutting out soda. There is no question a tax would decrease consumption of sugar-sweetened beverages. Economists estimate a 10% price increase would result in a 10% consumption reduction. Otherwise, why would the beverage industry use a strategy from the tobacco playbook and establish a front group — Americans Against Food Taxes — meant to evoke images of a vast consumer uprising?

Congress has discussed a tax on sugared beverages as a means to fund healthcare but thus far has yielded to industry pressure and taken no action nationally. It is often the case, however, that states and cities take action before the federal government mobilizes. The California Legislature is set to hold hearings in November to consider taxes and fees on soda as a way of addressing obesity and healthcare problems in the state. With a penny-per-ounce decision, California could set an example for the rest of the country.

Kelly D. Brownell is director of the Rudd Center for Food Policy and Obesity at Yale University. David S. Ludwig is associate professor of pediatrics at Harvard Medical School.

Copyright © 2009, LATimes

HARRISBURG – When it came to raising new sources of desperately needed revenue, stogies and chaw appeared to be the lowest-hanging fruit.

Every other state imposes excise taxes on smokeless tobacco, and all but one other – Florida – do so on cigars. And the idea was widely popular in the Keystone State, public-opinion polls showed.

So how did the ripe-for-the-picking products avoid being affected by the cornucopia of taxes that top lawmakers announced last week would balance the state budget?

Johnna Pro, press secretary for the House Majority Appropriations Committee, has a theory.

“Because the majority of people negotiating the budget are cigar-chomping men,” she said. “It’s sexism.”

That tongue-in-cheek reasoning aside, Pennsylvania lawmakers have clearly rebuffed an idea that most agree could have generated $38 million in new tax revenue this year.

Last week, leaders of three of the four caucuses announced that they had reached a budget agreement on a $27.9 billion spending plan. They said the package provided $1.2 billion in new revenue that the state could count on for years to come, including a 25-cent-per-pack hike in the cigarette tax.

But still no tax on smokeless tobacco or cigars – a proposal that seven out of 10 Pennsylvanians support, polls have shown.

Antitobacco groups said they were stunned that the products were not included in the plan as they had been led to believe by top legislators.

“It makes zero sense,” said Kevin O’Flaherty, the Northeast advocacy director for the Campaign for Tobacco Free Kids. “It’s fine to raise the price of cigarettes. . . . But it increases the disparity in price between cigarettes and other tobacco products, and that encourages kids to use those products.”

Already, he said, the rate of 16- to 25-year-olds in Pennsylvania using those products is twice the national average.

Senate Democrats supported taxes on cigars and smokeless tobacco, and Brett Marcy, a spokesman for House Democrats, said that caucus had supported the proposal but was unsuccessful getting Senate Republicans to sign off.

“We agree that it is a commonsense tax and a ready source of revenue,” he said. “But the political realities being what they are dictated that it may not be possible this budget year.

“There was just not an appetite in the Senate Republican caucus to look at those options.”

Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi (R., Delaware), said leaders dropped the cigar and smokeless-tobacco tax because of its minimal effect on closing the budget deficit.

“The amount which would be raised . . . is so relatively small that it is immaterial to producing a balanced budget,” Arneson said.

Yet the parties did reach compromises on other, even smaller, budget items. For instance, they agreed to take $25 million annually from the profits of the state-run liquor-store system and use it for general government functions.

Gov. Rendell has vowed to veto the three-caucus compromise budget, arguing that it is built on “phony” and overly optimistic revenue figures that, when they don’t materialize, will put the state in this very position next year. He also said the spending plan shortchanged education.

Legislative leaders from the three caucuses spent much of yesterday in closed-door talks with administration aides in hopes of ending the budget standoff. Senate Republican leaders said late yesterday that a final budget agreement could be hashed out today, setting the stage for approval by the bipartisan conference committee as early as tomorrow. The state, which began its fiscal year July 1, has been operating under a stopgap spending plan.

Rendell repeatedly has said that taxing snuff, chewing tobacco, and cigars was a no-brainer, and he has expressed frustration that the General Assembly hasn’t agreed with him.

“It is a special interest that continues to be treated as special,” said Gary Tuma, Rendell’s press secretary. “The administration favors taxing these products as other states do. Not doing so defies logic.”

The tobacco taxes also weren’t in the revenue mix in another compromise plan offered by Rep. Sam Smith (R., Jefferson), the leader of House Republicans, who were not party to the three-caucus budget agreement.

“When you listen to the governor and the Democratic leaders, they are literally saying ‘tax it because it is not taxed,’ ” said Steve Masking, Smith’s spokesman. “We don’t believe that something should be taxed just for the sake of taxing.”

Sharon Ward, director of the Harrisburg-based Pennsylvania Budget and Policy Center, said she believed Republicans were sticking to their “no-new-tax pledge” and “listening to their inner Rush Limbaughs” when they decided to forgo the smokeless-tobacco and cigar taxes.

“It’s discouraging that they would bypass a revenue idea that has virtually no impact on Pennsylvanians and minimal impact on industry,” she said.


Contact staff writer Mario F. Cattabiani at 717-787-5990 or mcattabiani@phillynews.com.

Haldimand-Norfolk MPP Toby Barrett has submitted a private member’s bill before the Ontario legislature on its first day back from the summer break, which calls for a dramatic reduction in the tax on cigarettes and cigars to fight the contraband trade.

His bill, which passed first reading Monday and will be up for second reading on Sept. 24, would replace the current Ontario Tobacco Tax with a new one that lowers the rate by 33% to 8.23 cents per cigarette from 13 cents per cigarette, and to 37.7% on a cigar from the present 56.6%.

His bill also calls for the change to be done in conjunction with the federal government’s tax policies.

“We must lower the taxes on those products legally to match the prices of the contraband trade, which carries on activities that allow cigarettes to be sold without paying proper taxes,” Barrett said in a telephone interview after first reading.

“What I am proposing is to do what we did in 1994 when contraband got out of control due to taxes that were too high. The situation changed as soon as taxes were lowered to a more acceptable level.”

Because the bill is one of the first out of the starting gate in the fall sitting and will be up for second reading in less than two weeks, Barrett acknowledged that MPPs in all parties know little about its purpose.

So he has prepared a sales job to lobby them on the necessity to use a change in tax policy to attack a contraband trade that now accounts for more than 50% of cigarettes on the street and robbed Ottawa and the provinces of an estimated $2.5 billion in 2008 alone.

Barrett will explain his bill before the Progressive Conservative caucus today.

His office has also prepared an package with background information on his bill to be distributed to every MPP in all three political parties.

Copyright © 2009 Brantfordexpositor

Florida’s new $1-a-pack cigarette tax has sent just the kind of strong anti-smoking message society needs to hear.
July sales dropped 17 percent compared to June, as the tax kicked in.

Lawmakers hoped the tax would beef up sagging state revenues.

The tax may not live up to its fiscal billing if sales drop enough, but it will still be a bargain if smoking drops, especially among price-sensitive kids.

With health care costs soaring and the nation convulsed by efforts to reform health insurance, healthy changes in living habits are crucial.

Eliminating smoking and obesity would improve our national health and cut costs.
They are matters of personal responsibility, of which we need a lot more.

Direct sanctions like taxes and educational outreach should be effected.

True, a lot of smokers are turning to Georgia or other cheaper sources in reaction to the tax. Let’s hope they grow weary of those efforts and quit, for their own good and everyone else’s as well.

Taxation on fatty foods is a lot less attractive.

It means too much government interference in decisions that are not always wrong, the way smoking is.

But insurance plans should start penalizing obesity.

We’re way past the time for pussy-footing.