Proponents estimate it would generate an additional $136 million annually. Smokers say it’s way too much. Health advocates say it’s not nearly enough.
The current tax on a pack of 20 smokes is 64 cents. It kicks $63 million into the state treasury each year.
Opponents of tobacco use told the panel to go for it and forward the measure to the full Unicameral for debate. They cited the health hazards linked to smoking.
On the contrary, say anti-smoking groups.
“We don’t think that the 31 cents goes far enough,” said Dan Curran, spokesman for a coalition that includes the American Heart and Lung Association and the American Cancer Society. “Raising the tax by $1 would bring in more than $354 million for the state in one year and the tax would still be below the national average of $1.45.”
The state’s cigarette tax has stood at 37 cents since 2003, when the Legislature voted to raise it from 12 cents. In January, the Special Council on Tax Reform and Fairness for Georgians released a set of proposals to remake the state’s tax code, including a jump in the cigarette tax. The council proposed a 31-cent-per-pack increase, which it said would generate an additional $114 million in tax revenue.
Henry Colley of Augusta, vice president of Sprint Food Stores, who operates 11 stores and employs 200 people in eastern Georgia, said that any cigarette tax increase is going to cut into his business.
“About 40 percent of our business comes from cigarette sales,” he said. “If this is passed, it’ll drive our customers over the state line to South Carolina. “If we lose this business, we won’t make payroll. We’ll have to have layoffs.”
South Carolina charges 57 cents a pack in tax.
The 11-member tax reform council spent months considering the cigarette tax and other issues, said member Gerry Harkins.
“The way we were looking at it was to find a [tax] rate that wasn’t the highest among the surrounding states, and something that wasn’t the lowest,” he said. “We wanted to be somewhere in between. Something that wouldn’t hit the retail establishments too hard.”
“We looked at tobacco for a long time,” Harkins said. “We also considered that tobacco use does have a health cost, but it wasn’t our purview to tell the Legislature how to use the funds.”
The U.S. Centers for Disease Control and Prevention estimates that the health costs caused by smoking total $7.18 per cigarette pack sold in the United States. And the CDC estimates that smoking cost the U.S. economy $96 billion in 2009, the latest statistics available.
Georgia taxpayers spend about $550 each year per household in subsidizing health care costs for smokers, according to Rep. Ron Stephens, R-Savannah, who supports the tax increase.
He said that Georgia’s current rate is the fifth-lowest in the nation, and the health care costs of smoking put an unfair burden on nonsmokers.
“I look on this increase as a user-fee for smokers, not a tax,” Stephens said. But he’s not certain that it will pass.
“Most of my colleagues will look on it as a tax increase,” he said.
Representatives from both the Georgia Tea Party and the Tea Party Patriots weighed in on the tobacco tax issue, and they are against it.
Julianne Thompson, the Tea Party Patriots’ state coordinator for Georgia, said: “We don’t support a tax increase of any kind. We think that there are still lots of fat to cut in state’s spending. And this increase certainly isn’t revenue-neutral to those who smoke.”
Cigarette tax per pack
A pack of cigarettes costs about $4.50 in Atlanta, depending on the brand and where you buy the pack. In New York, the state tax alone is $4.35, and in New York City, the total cost of a pack can exceed $9.
Federal excise tax
$1.01 per pack
State excise tax
Top five (per pack)
New York $4.35
Rhode Island $3.46
Bottom five (per pack)
Alabama 43 cents
Georgia 37 cents
Louisiana 36 cents
Virginia 30 cents
Missouri 17 cents
Sources: National Conference of State Legislatures, nyc.gov, AJC research
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