Prop. 303 a Health Care Tax

Posted on October 06, 2002 | Type: In the News
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The proposed 60-cent tax increase per pack of cigarettes is a desperate attempt to help Arizona out of its financial mess at smokers' expense, opponents say.

Proponents tout it as the ticket to save lives and keep kids from tobacco.

"Smokers are an easy target to fill the state's treasury," said Darcy Olsen, executive director of the Goldwater Institute. "It's not fair to single out smokers. Everybody should then be taxed to carry the burden of providing health care to the poor."

Arizona faces a $1 billion budget shortfall next fiscal year. And like 18 other states have done this year, the Grand Canyon state is turning to tobacco products for cash.

If approved by voters on Nov. 5, Proposition 303 would increase the tax to $1.18 a pack.

A good chunk of the $149 million Arizona expects to collect annually from the proposed tax would go toward health care coverage for the poor. If the proposition fails, the state will have to dig up roughly $63 million for that purpose.

The rest of the money would help keep trauma centers and emergency rooms open, subsidize health care research and pay for tobacco prevention programs to keep youngsters from reaching for a cigarette. 

"The tobacco industry is afraid of losing profit," said Bill Pfeifer, president and CEO of the American Lung Association. "We're afraid of losing lives."

Tom Ryan, of Philip Morris U.S.A. in New York, argues that imposing higher taxes on tobacco won't solve the state's fiscal problems and will ultimately mean less money for Arizona because smokers could get cheaper cigarettes from neighboring states.

"It's a bad economic policy," Ryan said. "Cigarettes are a declining source of revenue because fewer people are smoking."

Nearly half the cost of a pack of cigarettes goes to government coffers in taxes and to pay states under a mammoth 1998 tobacco settlement agreement, Ryan said.

No one disputes a new tax on tobacco would help Arizona's budget, said state Rep. Bob Cannell, a Democrat from Yuma supporting the proposition.

But he rejects the notion that smokers are being unfairly targeted, saying everyone ends up paying when they get sick.

"Smokers are very expensive to the state," Cannell said.

The measure is also crucial to keep lawmakers from using money earmarked for tobacco education programs to pay for other needs money, Pfeifer said.

The threat of that is real.

In July, for instance, lawmakers slashed $18.3 million from the state's anti-tobacco education, or 50 percent of the program's budget, infuriating health advocates whose answer was to push for Proposition 303.

"If this proposition fails, we will see an award-winning program disappear over time," Pfeifer said. "The Legislature would go after those monies if we don't protect them."

Arizona can't afford to get rid of a program that has helped cut smoking among teenagers and pre-teens by 24 percent between 1996 and 1999, Pfeifer said. Two percent of the new money raised under the measure would go to education programs and pay for early detection of the four leading lethal illnesses such as cancer.

More urgent, proponents say, is the need to maintain trauma centers and emergency rooms, which are constantly losing money because they are required to care for patients regardless of their ability to pay. Some centers, which care for the most seriously injured from car accidents, gunshot wounds, assault, stabbing and other incidents, have been on the brink of closing.

Overall, the new tobacco tax would generate about $30 million annually for trauma centers, emergency rooms and other health care facilities.

Reach the reporter elvia.diaz@arizonarepublic.com or (602) 444-8948.

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