Cigarette tax hike still breathing

An increase in the state user tax on tobacco products that looked to be heading into the legislative ethers Friday morning will hover a while longer.

SB114, which proposes increasing Utah's tobacco product user tax to $2 per pack from 69.5 cents along with commensurate bumps for cigars, snuff and pipe tobaccos, arrived with "maybe next year" status after it was suddenly switched to the Senate Revenue and Taxation Thursday, the least likely panel to favor new taxes of any kind — even in a revenue-light budget year.

Sen. John Valentine, R-Orem, might have rescued the bill, or at least postponed its demise, by proposing that the tax only be increased by $1.30, the national aaverage, which would raise the total tax to $2 per pack. The committee did not vote on the bill but agreed to consider it again when the language was changed to reflect the lower increase.

Groups such as United Way of Salt Lake and the American Cancer Society piled on the statistics about the costs of smoking, such as smokers on Medicaid rack up $104 million in bills annually. Overall, costs per pack of cigarettes amount to $7.75, even thought the state currently assesses 69.5 cents per pack.

The bill's sponsor, Sen. Allen Christensen, R-North Ogden, said his bill is about improving the public health by nudging smokers to quit because the habit is too expensive, not so much about raising revenue for the state.

He got no argument from committee members on the negative health aspects. But they clearly didn't care for the increased tax, which they worried cut too deep and was too targeted.

"The best tax policy is broad-based and low-rate," Sen. Wayne Niederhauser, R-Sandy, said. "What we're asking here is taking $60 million from people who might just be about to buy a car or a home."

Taxpayer advocates said that the increase would not drive smokers to kick their habit, so much as it would just encourage them to drive to lower states for cheaper cigarettes.

It would also drive retailers out of business. Gary Klc, owner of Jeanie's Smoke Shop in Salt Lake, said the proposal as it stands will force him to close.

"I'm finished if this passes," he said, "No joke. Not because of cigarettes. They don't amount to much. It's the cigar and loose tobacco increase that will do us in. We've lost so much to Internet sales as it is, and we just simply couldn't make it."

E-mail: jthalman@desnews.com