Mixed Smoking Signals

While the governor’s budget proposal addresses numerous facets of North Carolinians’ lives, it was the cigarette tax that drew the most attention Tuesday from officials who reacted to the plan.

Rep. Darrell McCormick, a Yadkin County Republican whose 92nd House district includes part of Surry, said the governor’s attempt to raise that tax contradicts an anti-smoking movement under way in the state. Earlier this year, a bill was introduced in the Legislature to prohibit smoking in all public and work places.

And when unveiling her budget Tuesday, the governor referred to the higher taxes for cigarettes and alcohol as affecting “discretionary” products, saying the increased costs should discourage people from using them. That, she added, also will reduce health-care and social costs the state faces as a result of smoking and drinking.

But McCormick doesn’t understand how raising cigarette taxes will generate new revenue while the state is discouraging tobacco use at the same time.

“It looks to me like you have to pick one track or the other,” the House representative said. McCormick also says the cigarette tax increase could prove counter-productive. “You can’t increase the price and expect sales to go up,” the area lawmaker said, “and to be simultaneously banning smoking in all public places.

“I don’t see any way that could work.”

As East suggested, Rep. Sarah Stevens of Mount Airy, who also weighed in on the budget proposal Tuesday, believes tobacco users in this area simply will venture across the state line to buy cigarettes.

Stevens said the governor appears to be “balancing the budget on the backs of state employees,” along with smokers and drinkers.

Sen. East added Tuesday that he fears the cigarette tax would be just one more slap to North Carolina’s tobacco industry.

The local legislator fears the time when R.J. Reynolds Tobacco Co., whose payrolls and taxes have played a major role in this area’s growth, might decide that enough’s enough and pull its operations out of Winston-Salem.

“That would be a tremendous impact, not only on Winston-Salem and Forsyth County, but our county, also,” East said.

Other Concerns

The governor’s proposal seeks to hike per-pupil expenditures for the state’s public schools, while also not cutting health-care services for people on Medicaid, two high-cost items.

While Rep. Stevens, who listed improving education as one of her goals on the campaign trail last fall, is encouraged by the higher funding proposed for education, she is not sure how it will directly benefit students.

“That’s great, I’m all in favor of it as it equates to classrooms,” the local representative said. “There’s a lot of questions in it about education,” Stevens added of the budget.

Another budget item that caught her attention is a plan to raise the fee for “professional” licenses from $50 to $200, which would generate another $27 million, according to Perdue.

Mount Airy Mayor Jack Loftis commented Tuesday on the large expenditures Perdue’s budget forecasts for education and health care. “She’s talking big dollars there,” he said. “And she’s not clear on where that money is coming from.” The spending package is counting on the federal stimulus funding, he said.

The mayor also believes the cigarette tax hike might be just another blow to low-income persons who are struggling. “I’m not real sure who that’s going to hurt the worst.”

From the city government’s standpoint, Loftis is concerned that Perdue could eventually dip into Powell Bill funds from gasoline taxes that the city relies on for street improvements, and tamper with sales taxes. That concern is fueled by Perdue’s plans to dip into state lottery funding to cover educational spending.

“We’ll be in dire straits if that happens,” the mayor said of losing Powell Bill or sales-tax revenues. He said that funding some of Perdue’s proposals logically will require other programs to “take the brunt on the cutbacks on spending.”

“We’ve got to wait and see where it’s coming from,” the mayor added of the money to balance North Carolina’s budget.

Dr. Darrin Hartness, superintendent of Mount Airy schools, said Tuesday that there are “a lot of unknowns” about the budget at this point. “I think it’s very early in the budget process to reach any conclusions,” Hartness added.

He pointed out that there is a long way to go in the process until a final budget is adopted by the General Assembly, a fact also highlighted by East.

“I’m just not sure where this budget is going to go,” the local senator said. “I’m sure it will be drastically altered in the Senate, and then in the House.”