Louisiana’s health advocacy groups see an opportunity this legislative session to get a long-sought cigarette tax hike in a state that has one of the lowest tobacco taxes in the country.
As lawmakers look to raise new money to plug a $1.6 billion budget hole, at least 10 tobacco tax measures have been filed for debate.
Even Gov. Bobby Jindal has shown a willingness to consider a cigarette tax hike, through a complicated maneuver that would help steer more money to public colleges without a net increase in taxes.
Five health advocacy organizations — including the American Cancer Society and the American Heart Association — have rallied behind a bill by state Rep. Harold Ritchie, D-Bogalusa, to raise Louisiana’s cigarette tax from 36 cents per pack to $1.54, the national average.
The measure, which could generate $250 million annually, is scheduled for consideration in the House Ways and Means Committee next week.
“This is the year that we need to take action,” Ritchie said in a written statement. “Most importantly, we know that this legislation will prevent thousands of people from dying prematurely. In addition, it will generate millions of dollars that are sorely needed.”
Ritchie, a pack-a-day smoker and funeral director, proposed a similar increase in cigarette taxes two years ago. The idea went nowhere in the anti-tax atmosphere of the Republican-led Louisiana Legislature.
But that was before Louisiana began seeing its worst budget troubles in decades and the state started running out of patchwork financing to fill gaps.
Now, lawmakers are looking for money-raising proposals that will meet the least resistance from voters in an election year. They’re considering scaling back some tax breaks for businesses, and they’ve indicated they’re willing to look at cigarette taxes as part of a budget-balancing package.
Only Virginia and Missouri have lower cigarette tax rates than Louisiana, according to the nonpartisan Federation of Tax Administrators.
Supporters of a tobacco tax hike say it would reduce smoking and smoking-related illnesses, and they say polls show strong public support for the tax increase.
Opposition comes from the tobacco industry and cigarette sellers.
The Louisiana Oil Marketers and Convenience Store Association opposes Ritchie’s bill in its current form. Executive Director Natalie Babin Isaacks said the association opposes an increase “that would make our family-owned and operated stores at a competitive disadvantage to neighboring states.”
“We understand the fiscal challenges being faced by the state. However, overtaxing a single product to the extent that it harms Louisiana-owned businesses is not only unfair but poor long-term public policy,” she said in an email Thursday.
Ritchie’s proposal to raise the state tax on cigarettes by $1.18 per pack would make Louisiana’s tax rate higher than the rates in Mississippi (68 cents), Arkansas ($1.15) and Texas ($1.41), according to Federation of Tax Administrators’ data.
Jindal has suggested a smaller cigarette tax increase to the Southern regional average of 83 cents, to raise $100 million. The money, under the governor’s proposal, would pay for a tax break that would be given to college students in exchange for millions of dollars in increased fees that would be charged by their schools.
The maneuver would keep the state from a net tax hike and allow Jindal to continue his anti-tax position while also driving new dollars to college campuses to offset budget cuts.