Huntsman wants hefty smoke tax

Revenue could offset loss of food sales tax

Published: Wednesday, Jan. 7, 2009 12:37 a.m. MST
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Gov. Jon Huntsman Jr. wants to raise cigarette taxes by enough so the state can afford to finally eliminate state sales taxes on food purchases despite the troubled economy.

The exact amount of the governor's proposed increase has not yet been determined, his spokeswoman, Lisa Roskelley, said, but he is expected to recommend raising the tax on a pack of cigarettes to around $3.

"It would be revenue neutral," Roskelley said of the proposed tax increase. "His interest has always been on removing the state sales on food."

Currently, Utah imposes a 70 cent tax on a pack of cigarettes. In 2006 and 2007, lawmakers sliced the state's share of sales taxes on food from 4.75 cents to 1.75 cents. The governor's proposal would not affect local sales taxes on food purchases.

Roskelley said the governor does not intend for the cigarette tax increase to be used to offset the state's budget shortfall. Huntsman's proposed $10.6 billion budget, which did not include the cigarette tax increase, was $1 billion less than what he recommended spending just a year ago.

"Everybody eats," Roskelley said. "This would be beneficial to everyone and he thinks this is the best way of doing it." She said the tax break that would affect every Utahn was not necessarily intended to stimulate the economy.

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Huntsman has long supported doing away with the food tax. The past reductions were made, however, during times of state surpluses when lawmakers fought over which taxes should be cut, as well as by how much.

This session, though, the governor and lawmakers are already squaring off over how deeply to slice state spending. The governor's proposal is the first hint of a possible tax cut.

Although the house has traditionally supported removing the sales tax from food, the senate is a tougher sell. "I don't think the senate is very excited," Senate President Michael Waddoups, R-Taylorsville, said, adding that GOP senators would be more inclined to use an increase to cover health care needs or to help fund health-care system reform efforts.

Improved health is cited by lawmakers who are already looking at increasing the cigarette tax, including Sen. Allen Christensen, R-North Ogden, who wants smokers to pay $2 a pack in taxes.

Christensen, who is a dentist specializing in pediatrics, is motivated more by ultimately reducing health hazards associated with cigarette smoke than by gleaning a revenue boost from those who create it.

If a large increase in the per pack tax motivates people to quit — and there is plenty of data showing that it will — "that's the most compelling reason to add it," Christensen said.

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