KS Senate drops tobacco tax hike from budget proposal
The 55-cent per-pack tobacco tax increase is out.
Kansas Senators have retooled a tax hike package ahead of a key floor debate aimed at erasing the state’s $500+ million budget deficit.
Last week, the Senate Ways and Means Committee endorsed a $434 million tax package that contained a 1-cent state sales tax increase, the tobacco tax hike, and the elimination of the business tax deduction.
The new tax package has a smaller price tag - $350 million in new revenue.
Last month’s terrible revenue collections - $65 million below estimates – prompted lawmakers to take a second look at the tax package and its accompanying budget. But politics were just as much a reason: the Senate is looking to craft a tax package that has some hope of passing – not just in the Senate but in the House too.
Getting rid of the tobacco tax could help win support of lawmakers living along the border, worried that tobacco shoppers will head to Missouri (or Oklahoma) to enjoy lower taxes. Lowering the overall size of the tax hike helps too.
So if the state’s deficit is even bigger, how did the Senators reduce the size of the tax package? Because their plan now relies on more federal funds - $185 million worth, including new funds for Medicaid.
Look for the full Senate to take up the budget and tax increases perhaps Wednesday.
Lawmakers in the House expect to debate their own budget proposal later today.
SEC Charges Tobacco Co. Employees with Bribing Officials
The U.S. Securities & Exchange Commission (SEC) has filed a case against four employees of Danville, Va.-based Dimon Inc., for paying $3 million as bribes to various Kyrgyzstan government official from 1996 to 2004 to purchase Kyrgz tobacco to resell to their customers.
The Commission’s complaint alleges that defendant Bobby J. Elkin, Jr., a former country manager for Kyrgyzstan, authorized, directed, and made the bribes through a bank account held under his name. The SEC further alleges that defendant Baxter J. Myers, a former regional financial director, authorized all fund transfers from a Dimon subsidiary’s bank account to the Elkin account and that defendant Thomas G. Reynolds, a former corporate controller, formalized the accounting methodology used to record the payments made from the Elkins account for purposes of Dimon’s internal reporting.
Finally, the SEC alleges that, from 2000 to 2003, Dimon paid bribes of approximately $542,590 to government officials of the Thailand Tobacco Monopoly in exchange for obtaining approximately $9.4 million in sales contracts.
Without admitting or denying the allegations, Elkin, Myers, and Reynolds consented to final judgments permanently enjoining each of them from violating anti-bribery laws and agreed to pay penalties of $40,000 each.
At the time, Dimon Inc. was the second-largest independent leaf-tobacco merchant in the world and owned tobacco leaf growing companies in the United States and more than 30 other countries, as well as 15 factories for processing the product.
In 2005 Dimon merged with Standard Commercial Corporation to form Alliance One International, Inc (NYSE: AOI), an independent leaf tobacco merchant serving the world’s largest cigarette manufacturers. Alliance One is based in Morrisville, N.C.
Smokeless Tobacco Debates
The Wall Street Journal’s “Numbers Guy” took a look at the arguments for and against smokeless tobacco as harm reduction for addicted smokers over the weekend. He mentions dangers often cited by critics of smokeless tobacco, writing, “All of these risks appear to be overblown, particularly compared with smoking, which is far more likely to kill than smokeless alternatives. But researchers who recommend these products as alternatives for smokers seeking to quit also are relying on hazy figures.”
“He’s right that cigarettes are more likely to kill than smokeless alternatives,” says ACSH’s Jeff Stier. “But if smokeless tobacco companies had made that simple and scientifically valid statement, they would be prosecuted under section 911 of the FDA tobacco legislation. He’s also correct that the data supporting harm reduction is hazier than we would like. We readily acknowledge that we would like to have even stronger data, particularly from the U.S., but the U.S. government won’t fund such critical research. And if the tobacco companies fund it, journals like PLoS Medicine wouldn’t publish it, and others would find it non-credible. Furthermore, such studies might not be approved by ethics boards.”
The article quotes Dr. Greg Connolly of the Harvard School of Public Health, who opposes smokeless tobacco on the grounds that smokeless users do not always quit smoking. “If we can get everybody to switch to smokeless, great,” Connolly is quoted as saying. “That would be wonderful.” However, he’s not optimistic about that prospect.
“This shows where Dr. Connolly is coming from on this issue, since he is well aware that we cannot be sure that everyone who uses smokeless tobacco will quit smoking,” says ACSH’s Dr. Gilbert Ross. “However, we know very well that only 10% or so of smokers are able to keep off deadly cigarettes for one year with the currently approved methods. This is unacceptable. In Sweden, where snus is commonly used, the number of quitters is much higher.”
ACSH’s Dr. Elizabeth Whelan agrees: “We don’t need to get everyone to switch completely in order to see public health improvements. No one is holding nicotine patches and gum to a standard of 100% efficacy, so we shouldn’t be doing so for smokeless tobacco either.”
Hamas burns recreational drugs, taxes cigarettes
Gaza’s Hamas rulers on Tuesday burned nearly 2 million pills of a painkiller many Gazans take recreationally because they say it relaxes them and provides temporary relief from the territory’s hardships.
The disposal of the drugs comes days after the Islamic militant group confiscated cigarettes from Gaza shops to collect taxes on them. Both moves are part of Hamas’ efforts to strengthen its grip on Gaza and impose its strict interpretation of Islam on the impoverished seaside territory’s 1.5 million Palestinian residents.
Hamas Health Minister Basim Naim said authorities burned some 1.7 million pills of a drug called Tramadol that had been seized from smugglers who sneak it through tunnels under the Egyptian border.
Tramadol is a powerful painkiller, related to morphine and heroin, though most countries don’t treat it as a controlled substance. Experts have said that those who stop taking the drug after regular use often develop flulike withdrawal symptoms, though long-term effects are rare.
Gaza’s Health Ministry recognizes the drug as a painkiller, Naim said, but allows its sale only by prescription.
The drug’s popularity in Gaza has grown in recent years as the quality of life has plummeted. Hamas seized the territory from forces loyal to Palestinian President Mahmoud Abbas in 2007, and Israel and Egypt imposed a strict blockade in 2007, causing shortages of many basic goods.
In late 2008, Israel launched a 3-week offensive in Gaza to stop militant rocket fire on Israeli towns. The war killed about 1,400 Gazans and left vast swaths of the strip in ruins.
The violence and hardship only increased demand for Tramadol, which Gazans who take it recreationally say takes their minds off their worries. Other say it delays ejaculation, enhancing sex. A sheet of eight pills costs around 40 shekels, or a little over $10.
Naim, the health minister, said Hamas wanted to prevent Gazans from seeking these unintended side effects.
“The issue has reached the level where some youth are addicted to this drug, and this makes them seek it out no matter what the cost,” he told reporters at the Health Ministry store room where the contraband was being held.
After he spoke, trucks loaded with sacks of Tramadol were driven to Gaza’s largest hospital. Workers carried them to the hospital incinerator where a man in a surgical mask tossed them into the flames. Thick black smoke billowed from the smokestack.
The burning of the drugs came days after Hamas police started seizing cigarettes from shops across Gaza. Hamas recently banned smoking in government offices and public places, and said it will levy a tax on cigarettes to limit their availability.
Statements from Hamas religious leaders saying Islam forbids smoking have also been posted on government websites, providing moral backing for a ban.
While the new measures will likely please Gaza’s hard-liners, they are bound to rankle those who feel the government is cracking down on the few remaining outlets Gazans have to relieve stress.
Khalil, a 25-year-old university student in Gaza City, said he suspected Hamas imposed the cigarette tax because it has financial problems and “wants the poor citizen to pay the bill for the government’s poverty.”
Khalil, who didn’t give his last name because of the sensitivity of the issue, said he used to smoke a pack of cigarettes a day and take a pill of Tramadol every other day to ease his mind. Now, he’s not sure how he’ll relax.
“We’re all living in a hard psychological situation and we used Tramadol to forget our daily worries and problems,” he said. “I go to Tramadol so I can forget all that.”
Philly To Swap Soda Tax For Cigar Tax
People who try to save money by rolling their own cigarettes may soon have to pay up.
A plan to tax businesses that sell tobacco products is expected to be introduced Thursday before Philadelphia City Council.
The proposed local tax would impact cigars, chewing and pipe tobacco, and other related products, but not cigarettes.
Councilman Darrell Clarke said he expects the plan to gain support in council.
“I think it is reasonable. We think that it’s obviously going to get significant support,” Clarke said. “I don’t want to have to get into the health implications of it, but I think that’s quite obvious. At the end of the day, I think it is a reasonable approach to try and fill in our budget gap.”
Clarke said Pennsylvania is the only state in the union that doesn’t tax tobacco products.
Smoking permitted on campus in certain buildings
Smoking has been a universal argument since cigarettes were first produced.
During the last couple of years, there have been several policies on smoking. One banned smoking on campus, for a smoke-free zone. Once again, smoking is permitted on campus.
Decades ago, smoking was allowed in certain building. At one point, students were able to go to the library, study, and smoke cigarettes while doing schoolwork. This was distracting to other students who were trying to study. It is also hazardous to others health as they inhale second-hand smoke. These are two reasons that there is a smoking ban in buildings, among policies that make smoking illegal indoors.
However, aside from legal issues, there are signs up in residence halls that indicate that there is smoking allowed in designated areas. Meaning that at one point, smoking was allowed somewhere in the residence halls. Residents were able to smoke inside instead of going outside. This was especially convenient to smokers during the long cold winters in West Chester.
Instead of a student leaving their room, they could stand by the window in their bedroom and blow the smoke out the window. Hopefully the resident signed up as a smoker, other wise their roommate will be surprised when the dorm room they share smells like cigarette smoke.
Since the signs have not been taken down since they were first posted in the 1960s when the residence halls were built, does this mean that smoking will be permitted once again in these buildings?
No, of course not.
Regardless of these deceiving signs, the rules will not change for smokers. This story was made to make fool you into believing there would be another policy change. Which is not the case; there are no policy changes. There are only outdated signs hanging up in residence halls.
Smoking is permitted outside the residence halls, and not inside any buildings on campus. Anyone found smoking cigarettes inside of a building would be subject to the consequences.
Re ‘Big Tobacco and the Historians’
I read this article with interest because I have been on the periphery of some of the events Jon Wiener describes. I would like to take this opportunity to correct the record on a few points.
In April 2008 Dr. Gregg Michel, an historian from Texas, contacted me in my capacity as graduate coordinator in the history department at the University of Florida. He was working for a law firm representing one of the tobacco companies, and he was looking for some advanced students to do microfilm research. He e-mailed me a short ad, offering $20 an hour for part-time research. I passed it on to the graduate students. I believe that he interviewed and hired two students at the time, and added two more some time later.
I later learned that the graduate students were assigned to read specific Florida newspapers for specific years. They were to look for and copy any stories that pertained to tobacco and health. Their instructions were quite clear: they were not to make any decisions about whether the stories supported or contradicted the arguments made by Big Tobacco. They were to identify everything remotely relevant and pass it on to Michel.
The following May I received a phone call from my colleague Betty Smocovitis. Betty had just heard from Stanford’s Robert Proctor, who had named four of our graduate students who were doing research on a tobacco case. She was extraordinarily upset about this news and she was particularly concerned because she feared that Proctor would use this information–including perhaps the names of the specific students–in a way that would reflect poorly on the department. I explained that the students were only doing the most basic low-paid research and were not engaging in any sort of advocacy. But she said that Proctor was a bit of a zealot and it was entirely unclear what he might do with the information. She indicated that it was entirely possible that he would publish their names, and she seemed to feel that it was pretty likely that he would present the department as somehow responsible. I passed this news on to the chair of the department and thought I was done with the whole thing. (A few days later Smocovitis e-mailed that upon reflection she doubted if he would use the specific names, but by then events were underway.)
The chair spoke to one of the students, to be sure that any work she was doing was within university guidelines (it was). He briefed her on the situation and she was justifiably worried that this fellow Robert Proctor would be publishing her name in some deceptive article (rather like Jon Wiener’s). She called Michel, who contacted the lawyers. They apparently smelled a rat.
A few months ago I was surprised to learn from a Chronicle of Higher Education reporter that my name appeared in e-mails and legal depositions that were part of a pending case. The tobacco lawyers had charged Proctor with meddling with their case and had deposed both Proctor and Smocovitis. The reporter told me that Dr. Smocovitis’s deposition indicated that the history department actively selected the students to work for Michel. I found myself forced to “go on record” to correct this huge error and to explain what our students had actually been doing. Stories appeared in the Chronicle and in the Gainesville Sun presenting various versions of the controversies swirling around Robert Proctor. (The reader can find both by Googling Smocovitis + Proctor.)
Now we have Wiener’s “Big Tobacco and the Historians.” The essay raises a host of interesting issues about what historians should and should not do, but it also raises a few serious concerns in my mind.
First, Wiener mentions the research done by UF graduate students and then immediately quotes a University of California-Irvine graduate student–Birte Pfleger–who describes how she had been instructed to engage in unprofessional research methods. The reader is left with the logical conclusion that the UF graduate students had behaved similarly. But Pfleger was working on another case for a different historian eight years ago. Meanwhile, the two recent newspaper stories on this case document that Michel did not give his research assistants this sort of unethical instruction. Why would Wiener omit this easily accessible information?
My second concern is how Wiener characterizes Proctor and his behavior towards those graduate students. Having interviewed Proctor, Wiener tells us that the Stanford professor is a helpless victim who had not tried to intimidate anyone. He merely wrote an innocent e-mail to Betty Smocovitis about UF students. I do not know Dr. Proctor and cannot look into his soul and determine his intentions (any more than Wiener can). I do know that Judge William A. Parsons of the Seventh Judicial Circuit Court, who presumably has more experience peering into people’s souls, reviewed the complex chain of events and the e-mails that Proctor sent–including some that he had apparently tried to destroy–and concluded that “he appears to have used Dr. Smocovitis to generate activity designed to harass, humiliate and cause the graduate students to either resign from doing work with Dr. Michel or run the risk of being the subject of national publications…” “This court,” Parsons continued, “is unable to construct any innocent reason for his conduct. While it is clear that Dr. Smocovitis was manipulated by Dr. Proctor, there is no question that Dr. Proctor was effective in his undertaking…” The e-mails presented to the court, he added, “represent the lowest of the low in terms of a professor of such high standing. To advance your own cause at the expense of graduate students trying to get through college strikes this court as appalling.” This opinion, dated November 20, 2009, is part of the public record. The Gainesville Sun quoted Judge Parsons on December 8, 2009. Wiener quotes the lawyers who he says were trying to intimidate Proctor, but he mysteriously fails to quote the judge who weighed all the evidence and found Proctor’s behavior so deplorable.
Historians, like judges and juries, are supposed to weigh evidence and come to considered opinions. In the process we are supposed to take pains to find the relevant evidence, and present a balanced portrait of that material to our readers even as we are making our arguments. Paid advocates–like lawyers and perhaps historians who work for lawyers–are supposed to tell the truth in the context of an adversarial process. Reasonable people can disagree about whether historians should ever be paid advocates for Big Tobacco. But it seems to me that when historians like Jon Wiener engage in supporting some historians and attacking others, they should go about their business like professional historians and not like paid advocates.
Open-wheel racing still trying to kick tobacco habit
It’s easy to say the split killed open-wheel racing.
And it certainly didn’t help.
But I think if you dig down a bit deeper, and you’re really objective about it, you can’t help but conclude that there were a confluence of factors that brought the IndyCar Series to its current state—which is to say, facing a slew of challenges.
One of the big factors is the evaporation of tobacco money that fueled auto racing for so long. The announcement today that Penske Racing will at last abandon Marlboro team colors is a sign that the last of the big tobacco money is going up in smoke.
There was a time that tobacco, beer and motor oil money accounted for more than two-thirds of motorsports sponsorships.
Money from tobacco sponsors kept auto racing rolling at almost every level through its halcyon days. The demographics of both made motorsports and tobacco marketing a near perfect match.
The packed speedways of the 1970s and 1980s were the perfect place to hand out free smokes, snuff, chewing tobacco and bandits alike. And those freebies transferred into sales. The partnership kept sales increasing for tobacco companies and sponsorship dollars rolling in for many race teams, tracks and series.
As odd as it seems, NASCAR—with its roots in the heart of tobacco country—was the first to limit its reliance with a new breed of mass retail type sponsors. Still, it was awfully hard for fendered car operators to say so long to Winston as NASCAR’s biggest series sponsor in 2003.
As late as 2000, North America’s three major racing series were still relatively flush with cash. They were, however, at different stages of realizing the iceberg that lay before them.
In 2000, NASCAR raised $558 million in sponsorship revenue and CART $492 million, compared with Indy Racing League’s $143 million, according to Chicago-based IEG Inc., a leading sports marketing analyst.
The Indy Racing League cast its bet with dot.com companies. In a bold gamble, the series partnered with start-up search engine Northern Light as its title sponsor in an endeavor, that in the end, only yielded a pan full of fool’s gold. Other dot.com sponsors on the series and team level came and went.
The consumer brands that flocked to NASCAR were—and remain—a tough get for the fledgling open-wheel series.
It’s not clear what path CART/Champ Car decided on. And in the end that helped drive a big wooden stake through the series’ heart. Series leaders’ inability to replace the tobacco cash had as much to do with the series’ death as Tony George and his hammer ever did.
Given the series’ relative health a decade ago, CART’s death was the most stark and stunning to watch. CART simply couldn’t or wouldn’t change as the current of commerce shifted.
Not only did government regulation help hasten the end of tobacco’s involvement in racing, but increasing education and a smoke-cessation movement began to eat away at tobacco companies’ sales—and marketing budgets.
In the end, CART/Champ Car fell like a 200-ton dinosaur dealing with a massive climate change.
It’s difficult to believe, 10 short years ago, there was $635 million in sponsorship cash coming into open-wheel racing, almost $60 million more annually than was coming into the good old boys’ fendered series.
Year-by-year, up in smoke it went, burning faster than a forest fire during a 100-years drought.
A plan never emerged to adequately replace lost sponsors. No vision ever materialized to connect the existing auto racing faithful and any emerging audience that might be out there with a new breed of sponsors.
With no bridge built between a new era of sponsors and what is left of open-wheel racing’s consumer audience, a smoldering past is about all some racing observers think we’re left with.
But for now at least, the IndyCar wheels keep turning—with testing underway in Alabama this week and the series ready to kick-off March 14 in Sao Paulo, Brazil.
Open-wheel’s new boss, Jeff Belskus, is still forming his plan for the future. And his big hire—new IRL President Randy Bernard—is ready to take office March 1.
And where there’s life, hope burns eternal.
Man steals cash, lottery tickets and cigarettes in Mission
About those stolen lottery tickets, they won’t be winners.
An armed robber this morning took them, cigarettes and money from a gas station food shop in Mission.
The man entered the BP Amoco Food Shop in the 5500 block of Johnson Drive shortly before 7 a.m., took the money and goods and left, police said.
Police Major Mark Sullivan said the lottery tickets will be listed as stolen and should only win a call to police if someone tries to cash winnings.
As for the odd mindset of many criminals, he said, “It never ceases to make me laugh.”
The man is described as a black male in his 20s, wearing a black woolen cap, white zipper jacket and black pants.
Decision to toss smokes evidence appealed
A prosecutor is appealing a judge’s decision to throw out evidence — more than 40,000 illegal cigarettes — that police seized from a Lunenburg County man’s car and home.
The exclusion of evidence last month meant the case against William Oswald Russell, 58, of Bar rs Cor ner was dismissed.
Senior Crown attorney Paul Scovil said he could not offer any evidence because the evidence he did have was ruled inadmissible, so Mr. Russell was acquitted.
Judge Jim Burrill also threw out the two search warrants that led to the subsequent seizure of the illegal cigarettes.
The judge ruled there were insufficient grounds for a justice of the peace to grant two search warrants to the RCMP in August 2008 to search a car, a Mahone Bay flea market stall and Mr. Russell’s home. Judge Burrill declared the search warrants inadmissible, saying the officer got them by presenting the word of a source who has a criminal record, was motivated by money and associates with criminals.
The same person was the source for both warrants.
Judge Burrill said while the officer did not act in bad faith in presenting grounds for the warrants, his conduct was negligent. Mr. Russell had been charged with six counts under the federal Excise Act and the provincial Revenue Act. Police seized 200 illegal cigarettes from his car on Aug. 24, 2008, and 46,200 more when they searched his home.
Defence lawyer Alan Ferrier argued that since the war rants were inadmissible, the cigarettes found as a result of them should not be allowed into evidence. The prosecution argued that to do that could bring the administration of justice into disrepute.
But Judge Burrill said the Supreme Court of Canada has ruled courts must take into account the long-term effects of such a decision. He said while excluding evidence “may provoke immediate criticism, it is the overall repute of the justice system, in the long term, that must be the focus.”
“Once a breach is established, some damage to the administration of justice has already been done, but the system must ensure that the inclusion of the evidence obtained does not do further damage,” his Jan. 29 decision said.
Judge Burrill ruled the improper search of Mr. Russell’s car was “significantly intrusive,” while the search of his home was “profoundly intrusive” because of the greater expectation of privacy regarding a person’s home.
Mr. Scovil said he has three grounds for appeal, and he believes the federal prosecutor is considering joining the case.
