Utah Legislature: One tobacco tax bill snuffed out; another smoldering

SALT LAKE CITY — One of two bills aimed at raising the state's tobacco tax was snuffed out by a legislative committee Thursday, but may still have a spark of life left.

SB40, (le.utah.gov/~2010/htmdoc/sbillhtm/SB0040.htm) sponsored by Sen. Allen Christensen, R-Ogden, looks to hike what is now among the lowest tobacco taxes in the country.

Christensen argued the change, which would add $1.30 to the current rate of 69.5 cents a pack, is focused on health issues and could result in helping tens of thousands of Utahns kick the habit or avoid starting. The added benefit, one highlighted by Sen. Ross Romero, D-Salt Lake, during debate of the bill, would be the much-needed infusion of cash that would come with the increase, more than $40 million in the coming year.

The Senate Revenue and Taxation Standing Committee, however, declined to move the bill forward Thursday morning, with some panel members expressing concern about the size of the bump.

"I am concerned about the level (of increase) that the bill is at," said Sen. John Valentine, R-Orem. "I can support the national average, $1.40 … I am uncomfortable at these levels."

The committee's vote to defeat the bill is aligned with the stance taken by Gov. Gary Herbert, who reiterated his opposition Thursday to any tax increases, including the tobacco tax, during taping of his monthly news conference on KUED Channel 7.

"I'm trying to be consistent. I know that's unusual sometimes in politics, but I've said no tax increases and I mean no tax increases," Herbert said. "The tobacco tax is a tax increase."

The governor noted that the revenue raised by a tobacco tax is not "going to be a significant amount of help to the budget."

During public testimony before the committee, some critics also raised questions about revenues, noting that when taken alone the tax receipts don't provided an accurate portrayal of the full fiscal impact of the bill. Utah Taxpayers Association vice president Royce Van Tassell said the change would represent a net loss for Utahns.

"We're in a difficult economic climate," he said. "This proposition would take some $100 million out of circulation in the economy in the first two years."

The executive director of the Huntsman Cancer Institute, Mary Beckerle, testified that health benefits associated with raising the price of cigarettes were unquestionable.