Leader Blues

Monday, February 02, 2009

TOP STORY>>Tobacco tax gets mixed reaction from lawmakers

By JOHN HOFHEIMER
Leader senior staff writer

Everyone seems to favor the Level I trauma system Gov. Mike Beebe is promoting, but the notion of increasing cigarette taxes to pay for it has its detractors.

The governor has proposed a 56-cent-a-pack increase in the state tax on cigarettes and new taxes require approval by 75 percent of each body of the General Assembly, a rigorous standard to meet.

Combined with a proposed 61-cent-a-pack increase in federal cigarette taxes to fund the expansion of the State Children’s Health Insurance Program, smokers could be paying an additional $1.17 a pack.

The current cost of a pack of cigarettes at one discount outlet is $3.89, so smokers could be paying $5.06 a pack. Cigarette industry lobbyists have come to town, although none of the area representatives say they were contacted by the lobbyists.

Locally, Bill Bevis and Joe Bell are registered as industry lobbyists.

It will be more difficult to approve the state increase with the federal increase looming, according to state Sen. Bobby Glover, D-Carlisle. But Glover says he completely supports the governor’s initiative.

Those opposed to the cigarette tax are taking “a normal blocking pattern,” said one observer. “Get Republicans and a few anti-tax rural Democrats,” and the issue isn’t likely to get the necessary votes.

Like the General Assembly as a whole, local delegates are split on the issue.

State Sen. John Paul Capps, D-Searcy, like Glover, favors funding the trauma system through the increased cigarette tax.

Among the local representatives, however, two Republicans oppose the tax increase, two Democrats are still making up their minds and one Democrat supports the tax, saying, “I’ve seen the devastation of smoking personally.”

Like many legislators, state Rep. Walls McCrary, D-Lonoke, received a donation from a tobacco company during the campaign. “I sent the check back,” McCrary said Thursday.

“When I was 29 my father died of lung cancer,” he said. “He came back from World War II and couldn’t kick the habit. Ten years later I lost mom to second-hand smoke. I wondered how long I was going to make it.”

But passing the tax, “it’s going to be really hard to do,” McCrary said. “The Governor and speaker (state Rep. Robbie Wills, D-Conway) are working real hard. It’s going to be real close, but to me it’s the right thing to do.”

“I’m still doing a lot of studying,” said state Rep. Mark Perry, D-Jacksonville. “I haven’t made a decision one way or another. I like the trauma center system as far as the service, but how to fund it is still undecided.”

During the campaign, Perry received a $250 donation from Reynolds American, as did many other legislators. He said that wouldn’t affect his vote and that he wasn’t aware of the tobacco lobby hosting any hospitality rooms for after session drinks and eats.

State Rep. Jane English, R-north Pulaski County, called the trauma center a great idea but “I’m totally against any new taxes. Arkansas is the 13th-highest taxed state.

English insisted that the system could be paid for out of the $300 million state surplus.

Tax proponents say that’s one-time money, not suitable for ongoing expenses.

“Most of the people in this district get up, pay their bills, pay their way and they are not looking for a lot of people to take care of them,” English said.

She promised not to raise taxes during her campaign.

“I’m against it,” said state Rep. Davy Carter, R-Cabot. “Not when there’s a $300 million surplus, 85,000 people out of work with 6.2 percent unemployment (in Arkansas.) Raising taxes is a bad idea.

“I don’t smoke and my family doesn’t smoke,” Carter said “I have no smoker empathy, but it seems a little unfair to me.

“I’d like to have a doctor (living in) everybody’s house, but you have to pay for this stuff,” he insisted.

“I haven’t made up my mind yet,” said Rep. Jim Nickels, D-Sherwood. “I see the merit on both sides. It’s a regressive tax, hitting a small group of Arkansans to benefit a lot more. I see the health-related things that could be funded.”

Nickels said he had received a lot of e-mails and phone calls favoring the tax as well as those against it. “It’s cut and paste, the same message,” he said, “or I get a little pink slip (from the switchboard) saying no cigarette tax.”

Glover said he heard there were some out-of-town cigarette lobbyists in town about a week ago but no one contacted him.

Glover said that the threat of a higher federal cigarette tax could make it harder to pass the Arkansas tax increase.

“The governor keeps saying it’s going to be a tough fight,” said Capps, “but a lot of members I’ve talked to, I find a lot of support.”

“This governor is real popular. When a governor is strongly for an issue, it has a lot of weight,” Capps said.

“I’m not a tax-happy guy,” he continued, “but I think in the final analysis, I’m going to vote for it. I strongly feel we need the trauma center.”

Capps said he always votes as if he won’t run for re-election, and this time it’s true. Term limits will prohibit him from running again for the state Senate or to be a state representative.

“Somebody is working the smokers,” said state Rep. Gregg Reep, D-Warren. “They are doing (automated) calls, and if you say you don’t want the cigarette tax, they patch the calls through (to the state Legislature switchboard).”

Reep, who is the primary sponsor of the cigarette tax bill in the House, says supportive people are calling and sending emails.

He said he hadn’t seen overt lobbying by the cigarette and smokeless tobacco people.
Reep says he’s got about 28 co-sponsors for his bill and probably 50 representatives or more who have said they favored the bill.

“I am cautiously optimistic,” Reep said. He expects that the governor will get out into the corridors and talk to the senators and representatives. “He’s very committed to it.

“Tobacco is the best source to generate the kind of income we need,” he said.