States may boost tobacco taxes

RICHMOND, Va. — Two of the nation's top tobacco-producing states are weighing whether to raise cigarette taxes to plug budget deficits that have sent politicians scavenging for sources of revenue.

The governors of Virginia and Kentucky have each proposed raising their cigarette taxes — each currently 30 cents per pack — to help offset revenue shortfalls of $2.9 billion and $456 million, respectively.

Such a move was once unthinkable in Virginia, where Philip Morris runs the world's largest cigarette plant miles from the state Capitol, and ceiling murals in the rotunda include impressions of the golden-brown tobacco leaf.

"I wouldn't be surprised if all the tobacco-producing states aren't at least considering it before long," said Amy Barkley, who directs advocacy efforts in the major tobacco states for the Campaign for Tobacco-Free Kids.

Virginia's tax would double to 60 cents a pack, just four years after its General Assembly passed a historic proposal to raise it from the nation's lowest level at 2.5 cents. Kentucky, the second-largest tobacco producer in the U.S., would raise its tax by 70 cents to $1.

Lawmakers in the six major tobacco states — North Carolina, Kentucky, Tennessee, Virginia, South Carolina and Georgia — have historically been more reluctant than other states to turn to their cash crop for extra revenue.

But since 2002, 44 states and the District of Columbia have increased their cigarette taxes. Still, while the average tax nationwide is $1.11 per pack, it is 33.5 cents per pack in tobacco states.

"A while ago some people would have said there's no way there's going to be any tobacco tax increase in any of these states, but there has been and it's been because of these dire budget needs," Barkley said.

That doesn't mean the taxes have had an easy time passing. In many cases, they've failed or stalled in states that still produce thousands of tons of tobacco and count on it for jobs.

Lawmakers in South Carolina, which has the nation's lowest tax at 7 cents per pack and produces almost as much tobacco as Virginia, approved a 50-cent per pack increase earlier this year. But they failed to override a veto from Republican Gov. Mark Sanford.

Facing staggering budget shortfalls in 2003, Georgia hiked its tax by 25 cents a pack. Advocates now want more to fund health care, but Republican Gov. Sonny Perdue and the GOP-led Legislature aren't making any moves to do it.