House panel kills higher cigarette tax

• By MARSHA SHULER
• Advocate Capitol News Bureau
• Published: Apr 29, 2009 - Page: 1A

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The House tax-writing panel killed a $1 cigarette tax increase on Tuesday, ignoring pleas from a roomful of proponents who said it would deter smoking and provide much-needed dollars for health care and medical research.

Eleven members of the House Ways and Means Committee voted against the tax. Seven voted for House Bill 75.

The cigarette tax would have raised nearly $200 million annually.  HB75 would have increased the current 20-pack tax from 36 cents to $1.36.

Gov. Bobby Jindal and his staff did not testify against HB75, but the governor repeatedly said prior to the session’s start that he would veto any tax increases.

But that did not deter state Rep. Karen Peterson, D-New Orleans, who as Speaker Pro Tem is the second-highest-ranking official in the House, from pushing the cigarette tax. Peterson told the committee she would continue proposing ways to improve health-care and education funding.

“If it’s not going to come from elsewhere in this building, I’m going to offer it because it’s my responsibility,” said Peterson, referring to Jindal. “Constituents want answers.”

Support came from a wide variety of groups, including physicians and heart, lung and cancer associations, as well as the Baton Rouge Area Chamber, the Louisiana Federation of Teachers and the AARP.

Convenience store owners and wholesalers opposed the legislation, arguing that it is a tax on a small segment of the population. They claimed the tax would hurt their business and comes on the heels of a federal excise tax hike on tobacco.

“We are taking a diminishing source of revenue, trying to fund a recurring expense with it,” said David Tatman, representing the Louisiana Wholesalers Association.

As debate began on the legislation, Peterson asked the House panel to adopt amendments dedicating proceeds from the tax to a dozen different state entities involved in the Louisiana health-care arena, including LSU’s Pennington Biomedical Research Center in Baton Rouge.

Half of the $1 would have gone to help to pay physicians, hospitals and other health-care providers who care for the poor through the Medicaid government insurance program, Peterson said. Funds from the state taxes would have generated $400 million in federal money.

Peterson said health care is dramatically under-funded in Jindal’s budget proposal. She said increasing tobacco taxes would improve that situation as well as people’s health.

“If there’s an increase in tobacco taxes, yes, there’s a decrease in consumption, thereby a decrease in the state of Louisiana’s health-care costs,” said Peterson.