By Brandon Moseley
Alabama Political Reporter
Tuesday, August 4, the House Ways & Means General Fund Committee rejected a measure to raise the cigarette tax by 25 cents a pack in a narrow 8 to 7 vote. Tobacco taxes were a key lynch-pin in both Governor Robert Bentley (R) and Chairman Steve Clouse’s (R-Ozark) plans to address shortfalls in the State’s troubled General Fund.
Fiscal conservatives are opposed to any tax increase.
A bipartisan groups of four Democrats joined four conservative Republicans in voting to reject the tobacco tax increase in a vote of the House Ways & Means General Fund Committee. The Republicans favor some version of the austerity budget that finally right sizes State government to match State revenues. The Democrats want a lottery. Neither group supports Gov. Bentley’s unpopular tax increases.
Health advocates wanted a much bigger cigarette tax increase. The American Cancer Society Cancer Action Network, American Lung Association in Alabama, and the Campaign for Tobacco-Free Kids issued a joint statement requesting that the legislature raise the taxes on cigarettes substantially to encourage more people to quit smoking and discourage teens and children from starting the habit.
The groups said in their release, “The proposal to raise Alabama’s cigarette tax by a paltry 25 cents per pack will generate little to no health benefits. To save lives, we urge the legislature to increase the cigarette tax by $1.00 per pack with a parallel increase on other tobacco products. Significantly increasing the price of tobacco products has been proven to be one of the most effective ways to reduce tobacco use, especially among kids. But tobacco companies have a documented track record of providing discounts that minimize the impact of small increases.”
The health groups continued, “This year in Alabama, the tobacco industry will spend $216 million on marketing its deadly products, most of which will be spent on price discounts to reduce the retail price of cigarettes, discount coupons and buy-one-get-one-free offers to consumers. These types of pricing strategies increase tobacco use among our kids. To make a significant and lasting difference for our kids, our State, and our future, legislators need to significantly increase the cigarette tax by $1.00 or more with a parallel increase on all other tobacco products.”
The groups said in their statement that, “A $1.00 per pack cigarette tax increase would decrease youth smoking by nearly 14 percent, encourage more than 32,000 current adult smokers to quit the deadly addiction and save almost 18,000 Alabamians from premature death due to the effects of smoking. Raising the price of cigarettes by $1.00 per pack would also generate more than $191 million in new, annual revenue for the State and save Alabama $1.19 billion in long-term health care costs from declines in adult and youth smoking.”
Chairman Steve Clouse (R-Ozark), who chairs the House Ways & Means Committee for the General Fund is promoting a 25 cent a pack increase in the price of a pack of cigarettes. Rep. Clouse told reporters that he was not for raising taxes on cigars since much of that is sold over the internet and isn’t taxed anyway. He also is not going to extend the tobacco tax to e-cigarettes and other vapor products. Clouse said he was not sure how much revenue was out there.
Clouse said that when the session ended Alabama had the fourth lowest taxes on cigarettes in the country. Since then Louisiana has raised their tobacco taxes to deal with their budget situation so we are now the third lowest in the nation. An extra 25 cents a pack would raise the state of Alabama back to being the fourth lowest in the country. “Nothing very harsh,” Clouse said.
Chairman Clouse said that the Governor’s plan raised $70 million in additional tobacco tax revenue, “Ours is 66 million.”
The group’s $192 million tax proposal would fill most of the estimated State General Fund (SGF) $198 budget shortfall.
The American Cancer Society Cancer Action Network is the nonprofit, nonpartisan advocacy affiliate of the American Cancer Society. They supports evidence-based policy and legislative solutions designed to eliminate cancer as a major health problem. ACS CAN works to encourage elected officials and candidates to make cancer a top national priority.
The American Lung Association works to save lives by improving lung health and preventing lung disease, through research, education and advocacy.
The Campaign for Tobacco-Free Kids fights to reduce tobacco use and its deadly toll in the United States and around the world. “Our vision: A future free of the death and disease caused by tobacco. We work to save lives by advocating for public policies that prevent kids from smoking, help smokers quit and protect everyone from secondhand smoke.”
Store owners, especially in border counties worry that raising tobacco prices too high might lead to people shopping for their cigarettes across the State line.
At this point, there appears to be no chance of a cigarette tax increase of any size during this session.
