Opinions aired on tobacco tax debate

By Richard Locker and Jon W. Sparks
Commercial Appeal
May 12, 2007

The fate of Gov. Phil Bredesen's proposed 40-cent cigarette tax increase remains in doubt, with both parties disagreeing on the need for a tax increase after new projections of state revenue show Tennessee will have up to $307 million more than predicted in the fiscal year that starts July 1.

"I feel it's very safe to say that Republicans in the Senate will not support a 40-cent cigarette tax increase. We're working with the governor on a compromise," Senate Speaker Ron Ramsey, R-Blountville, said at his weekly news conference Thursday. But neither Ramsey nor Senate Republican Leader Mark Norris of Collierville would say how much of a tax increase they favor.

On Friday Norris said that for the Democrats, "to say 40 cents or nothing, is not productive. They need to tell us why that is necessary and why a lesser amount is not more prudent."

But Bredesen and House Democrats continue to press for the full 40-cent hike -- which would raise the tax on a pack of cigarettes to 60 cents -- saying that it will be needed to fully fund the $476 million in education improvements the governor has proposed, plus an array of other spending ideas that most lawmakers seem to favor.

Those include an $87 million anti-crime package sought by law enforcement and prosecutors, a $100 million compensation improvement package for state employees, in addition to the school funding.

"Forty cents is going to be essential if we're going to do these things that everyone has wanted to do for a long time," said House Democratic Leader Gary Odom of Nashville.

Senate Minority Leader Jim Kyle, D-Memphis, said Friday there were two good reasons for moving ahead with the 40-cent increase.

"Nothing deters people from starting smoking better than higher prices on tobacco, and stopping children from smoking is a laudable goal," he said.

To that, Norris said, "No connection has been made either by the administration or the Democratic caucus between the money to be raised and the need to combat the ills of tobacco."

Kyle also said passage of the increase, combined with the healthy fiscal outlook, would help shift the cost of education from local governments to the state. "The state pays 65 percent of the cost of education. By going to 75 percent, it reduces the need for local governments to raise property taxes."

The picture is expected to come into clearer focus next week as the finance committees of both the House and Senate begin the serious final work on the state budget.