A proposal for a $1-per-pack cigarette tax increase was snuffed out by the House Ways & Means Committee in an 11-7 vote Tuesday, signaling probable doom for any proposals to generate major new sources of tax revenue during the current lawmaking session.
House Bill 75 by Rep. Karen Carter Peterson, D-New Orleans, was projected to raise nearly $200 million annually in state revenue while reducing consumption of the cancer-causing products. It encountered opposition in Gov. Bobby Jindal’s stance against new taxes and from panel members for various reasons.
“Raising the cigarette tax a dollar could place an economic hardship on people at this time,” said Rep. Ricky Templet, R-Gretna, who noted lean recessionary times in Louisiana households as a reason for voting against the bill.
Rep. Mike Danahay, D-Sulphur, said he voted against the bill because it could potentially reduce retail sales in his southwest Louisiana district, which hosts many visitors from Texas driving in for the casinos and general travel.
The state cigarette tax in Texas is $1.41 per pack, compared with Louisiana’s current rate of 36 cents.
Another argument made against the tobacco bill was the recent increase in the federal cigarette tax from 39 cents to just under $1.01 per pack, which took effect April 1.
Six Democrats on the panel voted for the bill and three voted against. Only one Republican voted for the proposal.
Peterson amended her bill during the hearing to designate some of the spending targets for the tax revenue. Those included money for health care provider payments that would have been matched by federal health-care dollars. The money also would have been steered to school-based health clinics, the Office of Mental Health, the Office of Addictive Disorders and tobacco cessation programs.
The proposal had the support of many doctors and health-care advocacy groups, including the American Cancer Society, the American Heart Association, the American Lung Association and the Coalition for a Tobacco Free Louisiana.
“In the end, House Bill 75 makes sense both from the public health and fiscal perspectives,” Peterson said after the meeting.
No one from the Jindal administration spoke against the bill, but committee Chairman Hunter Greene, R-Baton Rouge, said he called the governor’s office for comment about the tobacco tax.
“No real reasons, no offer of solutions, but they’re opposed to the tax,” Greene reported to the committee.
Greene was critical of the governor’s team for avoiding testimony on the two tax-increase bills on the committee’s agenda Tuesday. He said he wanted the administration to engage in the debate and offer explanations for its opposition to the tax increases.
Jindal is backing extensions for a variety of business-related tax breaks but has said he opposes new taxes and tax increases during this session. Peterson’s bill and another for a fuel-tax increase, which was withdrawn at least temporarily from consideration Tuesday, were considered doubtful to pass although they represented perhaps the best chances for new taxes in this session.