Cigarette tax hike shelved amid opposition
BATON ROUGE (AP) — A bid to raise cigarette taxes to the rates charged in neighboring Texas stalled in the House tax committee Monday, as lawmakers continue to show resistance to raising any of Louisiana’s current tax rates.
Rep. Harold Ritchie pulled his proposal to boost Louisiana’s cigarette tax from 36 cents per pack to $1.41 before a vote in the House Ways and Means Committee, saying he didn’t have the support to advance the measure to the House floor.
“I’m a good vote-counter. I knew I didn’t have the votes,” Ritchie, D-Bogalusa, said after the committee hearing.
Lawmakers sponsoring other proposals to bump up tobacco taxes by smaller amounts also didn’t seek committee votes Monday, though those bills could come up for a hearing later this week.
Ritchie said he’s not sure a measure to raise Louisiana’s cigarette tax to the 68-cent rate of neighboring Mississippi could even get support from the Ways and Means Committee.
Opponents include convenience store owners, the tobacco industry and anti-tax groups.
Supporters of the tobacco tax hike said it would reduce smoking and smoking-related illnesses while also generating much-needed money for the state’s budget.
Ritchie, a pack-a-day smoker, said Louisiana spends $1.7 billion annually on health care costs attributable to smoking, and he cited data that one-quarter of the state’s residents smoke.
“Increasing the tobacco tax in Louisiana is one of the most effective ways to decrease the number of people smoking,” said Tonia Moore, associate director for the Louisiana Campaign for Tobacco-Free Living.
Louisiana’s cigarette tax is among the lowest in the nation. Only Virginia and Missouri have lower tax rates, according to the nonpartisan Federation of Tax Administrators.
“We have one of the highest smoking rates in the nation. That’s unacceptable. Part of that is because we have the cheapest packs of cigarettes,” Moore said.
Ritchie’s bill would have boosted cigarette tax rates to the same level as Texas and would also have increased taxes on other tobacco products, like cigars, with the new rates to kick in Jan. 1, 2014. The $264 million estimated to be raised annually would have been split among several causes, with much of the money going to health care.
Opponents said they don’t believe higher prices drive people away from smoking. Retailers who sell cigarettes said the tax hike could harm their businesses, force them to lay off employees and push them to close stores.
Darrell Amar, president of the Louisiana Oil Marketers and Convenience Store Association, said people would continue to spend money on cigarettes with a tax hike, but that would shrink what they spend on drinks, candy and other items at stores.
“Any tax increase would be detrimental and would negatively affect each location around the state,” Amar said. He added, “Nothing good will come from higher taxes.”
Many opponents also disagree philosophically with raising taxes, and cards in opposition were filed by several anti-tax groups. Gov. Bobby Jindal has said he’ll veto any tax hike that isn’t offset with tax reductions elsewhere.
Ritchie said he didn’t think the veto threat was a significant factor.
“I don’t know that they’re worried about a veto as much as the lobbyists have done a good job,” he said.