US: $1.54 Louisiana Cigarette Tax Proposed

Source from:  Baton Rouge (LA) Advocate 03/25/2015

State Rep. Harold Ritchie wants to raise the state cigarette tax to $1.54 per pack - a more than four-fold increase - as Louisiana struggles to close a looming $1.6 billion state budget hole.

The current tax is 36 cents per pack - the third lowest in the nation. Ritchie, a smoker, has prefiled both a proposed constitutional amendment and a separate statutory law change to hike the tax to the national average of $1.54.

Constitutional amendments require a two-thirds vote of approval by the Legislature, and then submission to the voters for approval. A constitutional amendment would be veto proof by Gov. Bobby Jindal, who opposes tax increases. The statutory change requires a simple majority for passage but would be subject to Jindal's veto pen.

Ritchie got some support Tuesday from the Louisiana Budget Project for a big increase in the cigarette tax - in fact a few pennies more than the one the Bogalusa Democrat is pushing.

"If there ever was a time to raise the cigarette tax it is now, when Louisiana desperately needs new revenue and smokers need extra encouragement to quit," Budget Project director Jan Moller said in a news release accompanying the group's latest report.

The Budget Project said raising the tax by $1.25 a pack would generate $230 million that could be used "to stave off state budget cuts."

"More importantly, it would help encourage 46,000 adults to quit smoking and keep 36,700 teenagers from taking up the habit. That would lead to $1.57 billion in long-term health care savings, including more than $500 million for Medicaid."

The Budget Project monitors and reports on public policy and how it affects Louisiana's low- to moderate-income families.

Moller said some "policymakers" may be tempted to pass a much smaller tax "to simply raise revenue." But to take that approach would be a "lost opportunity to improve public health," he said.

"If policymakers want to create long-term health care savings and save lives in addition to helping the state budget, they should support a $1.25 a pack increase."

Cigarette smoking in Louisiana costs taxpayers almost $700 million per year, the Budget Project reported, the equivalent of $403 for every household.

The Budget Project report also said that smoking adds $523 million per year in Medicaid costs, $88 million in LSU public-private partnership hospital costs and $85 million in costs for state employee and retiree health benefits.

The group noted that private sector businesses also incure higher health insurance costs and lost productivity because of smoking. Enditem