Make 2010 the year cigarette tax goes up
Lawmakers generally are loath to raise taxes, but increasing the cigarette tax is a hike many South Carolinians would support, and in a tough budget year, the money would be welcome.
Last year, lawmakers came tantalizingly close to raising the tax by 50 cents a pack, up from the shamefully low 7 cents a pack. But they couldn’t agree on how to spend the estimated $147 million it would raise.
They can do it this session if they’ll put their minds to it.
Gov. Mark Sanford’s spokesman indicates that the tax hike might not face the veto hurdle it couldn’t clear in previous years. Federal health care reform could make the difference.
Sanford will oppose the federal bill, Ben Fox told The (Columbia) State newspaper, but “wouldn’t put a blanket prohibition on (using cigarette tax revenue) without seeing how it plays out.”
The governor previously has insisted that a matching tax break come with a cigarette tax hike. Supporters of the hike haven’t been able to generate the two-thirds vote needed to override Sanford’s veto.
The federal bill could add $1 billion to South Carolina’s Medicaid costs in the next decade, officials estimate.
South Carolina spends an estimated $1 billion a year on smoking-related illnesses.
A look at South Carolina’s record on cigarette taxes and programs to stop smoking leads us straight to the bottom. Our tax of 7 cents a pack is the lowest in the country. It hasn’t changed since 1977. The national average now stands at $1.34 a pack.
The Campaign for Tobacco Free Kids reports that the average cigarette tax for major tobacco states (Kentucky, Virginia, North Carolina, South Carolina, Georgia and Tennessee) is 40 cents a pack; for all other states, it is $1.46 a pack. Cigarette taxes in the other tobacco states range from 30 cents in Virginia to 62 cents in Tennessee. We’re doing our part to keep down the average.
And we earned a big fat “F” for our smoking prevention efforts in a new report released last week. According to the American Lung Association, South Carolina is one of six states to score all “F’s” for their efforts on tobacco prevention and control spending, smoke-free air laws and rules, taxing cigarettes and helping smokers kick the habit. The other states with all failing grades were Alabama, Mississippi, Kentucky, Virginia and West Virginia.
The South Carolina House version of the bill raising the cigarette tax allocates $5 million a year for smoking prevention and cessation programs. The state spent no money in fiscal year 2009, down from $2 million in fiscal year 2008. Spending $5 million would be a step in the right direction, but it’s still far short of the $62.2 million a year recommended by the U.S. Centers for Disease Control and Prevention. That figure was based on the amount of money generated from tobacco sales in South Carolina.
Tobacco lobbyists say it’s bad fiscal policy to rely on a tobacco tax to pay for health care costs. If the tax works to reduce smoking by raising the cost, then revenue from the tax goes down.
But so, too, would the incidence of tobacco-related illnesses. And that should be lawmakers’ first concern.
Wipro ties-up with British American Tobacco
Bangalore: IT major Wipro Technologies has entered into a multi-year outsourcing engagement with British American Tobacco, to help the company improve the effectiveness and efficiency of application support services for its global business operations.
Under the agreement, both companies will partner to leverage Wipro’s global scale and transformational capabilities to achieve step change results in productivity, IT costs and service quality. More specifically, the agreement will provide an enterprise-wide global application support delivery model and capability, reduce the total cost of ownership and allow more opportunities for value added services to business users of British American
Tobacco.
Commenting on the agreement, Ben Fourie, Head of Global IT Services at British American Tobacco, said, “We believe this is the right way forward for us in terms of our IT strategy. These changes will help us improve the application support service quality, facilitate better integration, enable enhanced knowledge sharing and, ultimately, help us become more competitive.”Wipro will be delivering this global program across over 130 countries in which British American Tobacco operates. Bhanu Murthy B.M., Senior Vice President - Retail, CPG, Transportation and Government, Wipro Technologies said, “We are excited to be chosen for this transformational initiative at British American Tobacco. Wipro will bring in standardized processes, methodologies and governance to set British American Tobacco on a strategic cost optimization path while ensuring a high level of service to the business and will participate in bringing in clear business benefits.”
Parkinson proposes sales, cigarette tax increases to start session
Facing a historic budget crisis, Gov. Mark Parkinson on Monday proposed a temporary one-cent increase in the state sales tax and an increase in the state tax on cigarettes of 55 cents per pack.
After cutting nearly $1 billion from a $6 billion budget over the past year, Parkinson said further cuts would do serious damage to Kansas.
“We are now cutting into the bone,” he said during the State of State address to start the 2010 legislative session. “Everything we have built is at risk,” he said.
He said that without additional tax revenue, more cuts would have to be made to schools, social services, universities and prisons.
But Parkinson’s tax proposal got a chilly reception, and quickly drew sharp criticism from Republicans, the Kansas Chamber, and Americans for Prosperity, an anti-tax group.
House Majority Leader Ray Merrick, R-Stilwell, delivered a stinging rebuke. “In a shameful change of course from when he took office last year, the governor has abdicated his duty to the taxpayers of Kansas by refusing to offer a balanced budget and demanding the largest tax increase in Kansas history.”
But Parkinson’s fellow Democrats and even some Republicans were more sympathetic.
State Rep. Tom Sloan, R-Lawrence, said protecting the state’s education system from further cuts is of utmost important. “Our education system is the foundation of all of our past successes and our future prospects,” Sloan said.
He declined to sign on to Parkinson’s proposal, but said more tax revenue is needed, and he praised the governor for putting a plan before the Legislature.
Sloan said Parkinson’s 30-minute speech, which was delivered without a teleprompter or notes, was the most inspiring State of the State address he has heard in his 16 years in the Legislature.
Parkinson reminded legislators of the tough decisions made by generations of Kansans that enabled many to attain the American Dream.
“Our ancestors worked too hard to build what we have. It is our turn to fight and it is a fight worth fighting,” he said.
House Democratic Leader Paul Davis, of Lawrence, said Parkinson laid out the choices facing the Legislature — harmful budget cuts or tax increases. He said a majority hasn’t formed for either position yet. “The Legislature has its work cut out for it,” Davis said.
He said House Republican leadership opposition to any tax increase was unfortunate. With further cuts, nearly every school district in Kansas will have to close some schools, he said.
Under Parkinson’s tax plan, the state sales tax would increase from 5.3 cents per dollar to 6.3 cents per dollar for three years and then fall back to 5.5 cents per dollar, with that extra two-tenths of a cent dedicated to a new highway plan.
He also called on lawmakers to increase the state tax on cigarettes from 79 cents per pack to $1.34 per pack, which is the national average. He said the increase would bring in needed revenue and deter young people from starting to smoke.
Even after five rounds of budget cuts in 2009, the Legislature still faces a $400 million revenue shortfall for the fiscal year that starts July 1.
The proposed sales tax increase would raise $308 million, while the cigarette tax increase would raise $70 million.
Under Parkinson’s plan, public schools would receive some of the funding that has already been cut, raising the base state aid per pupil from $4,012 to $4,062. At one point, the level was around $4,400 per student.
Higher education, which has been cut more than $100 million, would get back $10 million. And a 10 percent cut in Medicaid, ordered by Parkinson in November, would be reversed.
The 10 percent Medicaid cut has become extremely unpopular because it also costs the state tens of millions of dollars in federal matching funds. House Speaker Mike O’Neal, R-Hutchinson, said Republicans are investigating whether there is a way to cut the budget without taking away state dollars that draw matching federal funds.
Make 2010 the year cigarette tax goes up
Lawmakers generally are loath to raise taxes, but increasing the cigarette tax is a hike many South Carolinians would support, and in a tough budget year, the money would be welcome.
Last year, lawmakers came tantalizingly close to raising the tax by 50 cents a pack, up from the shamefully low 7 cents a pack. But they couldn’t agree on how to spend the estimated $147 million it would raise.
They can do it this session if they’ll put their minds to it.
Gov. Mark Sanford’s spokesman indicates that the tax hike might not face the veto hurdle it couldn’t clear in previous years. Federal health care reform could make the difference.
Sanford will oppose the federal bill, Ben Fox told The (Columbia) State newspaper, but “wouldn’t put a blanket prohibition on (using cigarette tax revenue) without seeing how it plays out.”
The governor previously has insisted that a matching tax break come with a cigarette tax hike. Supporters of the hike haven’t been able to generate the two-thirds vote needed to override Sanford’s veto.
The federal bill could add $1 billion to South Carolina’s Medicaid costs in the next decade, officials estimate.
South Carolina spends an estimated $1 billion a year on smoking-related illnesses.
A look at South Carolina’s record on cigarette taxes and programs to stop smoking leads us straight to the bottom. Our tax of 7 cents a pack is the lowest in the country. It hasn’t changed since 1977. The national average now stands at $1.34 a pack.
The Campaign for Tobacco Free Kids reports that the average cigarette tax for major tobacco states (Kentucky, Virginia, North Carolina, South Carolina, Georgia and Tennessee) is 40 cents a pack; for all other states, it is $1.46 a pack. Cigarette taxes in the other tobacco states range from 30 cents in Virginia to 62 cents in Tennessee. We’re doing our part to keep down the average.
And we earned a big fat “F” for our smoking prevention efforts in a new report released last week. According to the American Lung Association, South Carolina is one of six states to score all “F’s” for their efforts on tobacco prevention and control spending, smoke-free air laws and rules, taxing cigarettes and helping smokers kick the habit. The other states with all failing grades were Alabama, Mississippi, Kentucky, Virginia and West Virginia.
The South Carolina House version of the bill raising the cigarette tax allocates $5 million a year for smoking prevention and cessation programs. The state spent no money in fiscal year 2009, down from $2 million in fiscal year 2008. Spending $5 million would be a step in the right direction, but it’s still far short of the $62.2 million a year recommended by the U.S. Centers for Disease Control and Prevention. That figure was based on the amount of money generated from tobacco sales in South Carolina.
Tobacco lobbyists say it’s bad fiscal policy to rely on a tobacco tax to pay for health care costs. If the tax works to reduce smoking by raising the cost, then revenue from the tax goes down.
But so, too, would the incidence of tobacco-related illnesses. And that should be lawmakers’ first concern.
Idaho Court Rules Against Online Tobacco Seller
The Idaho Supreme Court has rejected an appeal by an online cigarette marketer who claimed his company was immune from state laws regulating tobacco sales.
The unanimous decision issued Friday affirms a lower court ruling in a lawsuit filed by the Idaho Attorney General in 2006 against Scott B.
In the original lawsuit, the state claimed Maybee, a Native American from New York, was violating state laws requiring cigarette peddlers to register with the state and pay a fee to the state. The laws were passed in the wake of the national tobacco settlement in 1998.
Maybee claimed Idaho laws don’t apply because he’s protected by federal interstate and Indian commerce laws.
The justices disagreed and awarded attorney fees and costs to the state.
Burglars bag cigarette haul
AN undisclosed quantity of cigarettes has been stolen from premises at Pennybridge Industrial Estate in Ballymena and detectives in the town are investigating.
The intruders forced open a door in order to gain access to the building around 7.25 pm on Friday, January 8.
Detectives investigating the burglary are eager to hear from anyone who noticed a van entering or leaving the premises around the time, or from anyone offered cigarettes for sale from an unusual source or at an unrealistic price.
Citizens Want to Tax Discount Cigarette Makers
Nearly two out of three likely voters say a Miami-based discount cigarette maker and others should cough up $200 million a year to combat the effects of smoking, according to a business backed poll released on Monday.
Facing a tight budget and competing with better-known brand cigarette makers that have already agreed to pay billions to the state, a poll commissioned by Associated Industries of Florida indicates voters would not be against imposing a fee on Dosal Tobacco Corp. and other discounters that were not part of a landmark 1997 agreement that continues to generate revenue for the state.
Only one in five opposed levying fees, according to the telephone poll of 801 voters conducted by Zogby International in early December. The poll has a margin of error of plus or minus 3.5 percent.
“If the whole point of the tobacco settlement was to ensure we as a state could pay the health care costs of future Medicaid recipients, it only makes sense that all cigarette manufacturers help pay for these costs,” AIF President and CEO Barney Bishop said in a statement. “To most Floridians a cigarette is a cigarette.”
Following a lawsuit, four major U.S. cigarette companies including Reynolds and Phillip Morris reached an agreement in 1997 that increased the cost of their products by about 45 cents a pack. The proceeds were meant to offset the public health expenses caused by smoking related illnesses.
But Dosal, a family owned brand run by Cuban exiles that comprised about 1 percent of the market in the early 1990s, wasn’t a party to the settlement. Dosal contends that the lawsuit was meant to publish the companies that did eventually settle for improper behavior, such as deceiving consumers – something the company says it wasn’t a part of.
By 2008, Dosal brands, led by “305” brand cigarettes, accounted for more than 15 percent of the Florida market. Dosal CEO Yolanda Nader said Monday the company was not part of the lawsuit and shouldn’t be penalized now.
“Dosal was not accidentally left out of the settlement, it was dismissed because it was not a party to the acts that the other tobacco companies were accused of and settled for,” Nader said in a statement. “Those paying into the settlement are doing so for past acts of wrongdoing, not for future health care costs.”
AIF, Nader contends, is acting as a front for big tobacco companies attempting to stop the erosion of market share to cheaper competitors. Increasing taxes on the home-grown company could jeopardize the future of the company that now employs 300 workers.
“This poll, its motives and its findings are all tainted, along with the credibility of those calling for a bail-out tax for Big Tobacco on a company that has paid its taxes and played by the rules,” Nader said.
State lawmakers have toyed with the idea of expanding the fee now paid by the Big Four cigarette makers. Previous attempts have been beaten back by the company, founded by Cuban immigrants in the late 1950s.
Though no bill has yet been filed, Senate Finance and Tax Committee chairman Thad Altman, R-Melbourne, told the News Service in November that he would likely file something to close the gap between companies that signed the 1997 settlement agreement and those that didn’t and now command about 20 percent of the Florida market.
Three arrested for illegal cigarettes
Three people were arrested for the possession of illegal cigarettes and an unlicensed firearm in Nyanga on Thursday, Cape Town police said.
Captain Ntomboxolo Sitshitshi said the men were nabbed after police received information about a Somalian shop owner who allegedly had an illegal firearm.Police followed up on the information and found a 9mm pistol, with its serial numbers filed off, ammunition and 13 cartons of illegal cigarettes.
Three men were arrested, aged 19, 24 and 27. They were due to appear in court on charges of possession of an illegal firearm and illegal cigarettes.
Kansas governor to propose tobacco tax increase
TOPEKA | Gov. Mark Parkinson will propose increasing Kansas’ tobacco taxes next year, a spokeswoman said this week.
The Democratic governor’s plan is likely to face strong opposition in the Republican-controlled Legislature, although the Senate’s top leader said he would support the idea.
Parkinson spokeswoman Beth Martino said Wednesday that the governor hasn’t settled on how much of an increase he will propose. But she hinted that he’s considering asking legislators to bring Kansas’ cigarette tax up to the national average.
Kansas’ cigarette tax is 79 cents a pack. The national average for states and the District of Columbia is $1.34 a pack, according to the Washington-based group Campaign for Tobacco-Free Kids.
“He is going to pursue a tobacco tax of some sort,” Martino said. “He is still looking at the options.”
Martino said Parkinson has not decided whether to ask legislators to dedicate the new revenue to health programs, or use it to help the state balance its budget for fiscal 2011, which begins July 1.
Legislative researchers estimate that increasing the cigarette tax by 55 cents, to $1.34 a pack, would raise about $88 million during the next fiscal year. The state also imposes a 10 percent tax on other tobacco products, but doubling it would raise only $5 million during the next fiscal year.
Parkinson said last week that he’s not planning to propose deeper cuts in spending to avoid a budget deficit for fiscal 2011. The state has had five rounds of cuts and other adjustments to keep the budget balanced for the current fiscal year.
He said he’s considering proposals to eliminate exemptions to the state’s sales tax and eliminate tax breaks granted in previous years. And he didn’t rule out raising some tax rates.
Senate President Steve Morris, a Hugoton Republican, said a cigarette tax increase would have the best chance of any proposal to raise tax rates.
“I would support it,” Morris said. “I think it’s probably the only tax increase that would have the possibility of getting through the Legislature.”
But many GOP legislators, particularly House conservatives, worry any revenue-raising measures will slow the state’s economic recovery and hurt struggling families.
House Taxation Committee Chairman Richard Carlson, a St. Marys Republican, said states typically raise taxes near the end of recessions — then see revenues boom upon recovery.
“I’m going to be very cautious about looking at tax increases,” Carlson said. “I think Kansas will grow out of this recession. We just need to look at it in the long term.”
Merchants also worry about losing business to other states. While Colorado and Oklahoma have higher cigarette taxes, Nebraska’s is lower, and Missouri’s, at 17 cents a pack, is second lowest in the nation.
Public health advocates have long argued that Kansans will support higher tobacco taxes if the money is used for health care programs.
But in 2002, when legislators boosted the cigarette tax from 24 cents, they did it to help close a budget shortfall. When Gov. Kathleen Sebelius outlined a plan in 2004 to raise tobacco taxes for health care, legislators ignored the proposal for several years.
More Young Smokers Use Menthol Cigarettes
More adolescents and young adults are smoking menthol cigarettes, according to a government report, a potentially troubling sign when overall smoking rates have dropped and menthol is the only flavoring not banned under sweeping tobacco laws passed earlier this year.
Menthol cigarettes make up about a quarter of the $70 billion market for cigarettes. Big producers of menthol cigarettes include Newport maker Lorillard Inc. and Kool manufacturer Reynolds American Inc. Menthol is an additive that scientists say may mask the harshness of tobacco and in turn lure people to start smoking, concerns the Food and Drug Administration will grapple with over the next year as it considers whether to ban the flavoring.
In 2008, the rate of smokers 12 to 17 years old using menthol cigarettes rose to 48% from 44% in 2004, according to a report by the Substance Abuse and Mental Health Services Administration, or SAMHSA. Among 18 to 25 year olds, the rate jumped to 41% in 2008 from 34% in 2004. The report doesn’t break down the figures by number of users, but about 4.2 billion menthol cigarette packs are sold annually, according to government statistics.
Overall smoking rates in the U.S. declined in 2008 compared to 2004, so health officials are concerned menthol encourages people to smoke.
“The apparent allure that menthol cigarettes have among younger, newer smokers is particularly troubling as menthol cigarettes may tempt more people to take up this dangerous deadly habit,” acting SAMHSA director Eric Broderick said in a statement.
Lorillard spokesman Michael W. Robinson said Wednesday that evidence shows smokers of menthol and nonmenthol cigarettes have the same rate of success in quitting smoking and “claims that menthol perpetuates smoking are not supported by the facts.”
The company saw a breakout of some of the report’s results but wasn’t able to see the full report because it wasn’t available for viewing until Thursday.
President Barack Obama in June signed a law giving the FDA authority to severely restrict tobacco advertising and ban certain candy flavorings. Menthol wasn’t banned for a host of reasons, according to experts, but mostly amid concerns that it would scuttle the overall legislation and could create a black market for the products.
The Congressional Black Caucus demanded that the bill place restrictions on menthol cigarettes because the products are disproportionately used among African-American smokers. About 80% of all African-American smokers use menthol cigarettes compared with about 20% among whites. The caucus also demanded that the FDA review, within a year, the safety of menthol and whether it should be banned. The FDA is in the process of setting up an advisory panel to study the issue.
Matt Myers, president of the Campaign for Tobacco-Free Kids, said this study adds “to the evidence that menthol plays a role in smoking initiation among kids.”
He said it sets off “alarm bells” because most cigarette smokers start as teenagers. “If menthol is increasing the number of kids who start, it’s increasing the number of people who will eventually die from tobacco.”
The SAMHSA study was based on a survey that asked more than 340,000 people 12 and older whether they smoked in the last month and what they smoked.
