State's Voters Will Decide Tobacco Tax Increases

Posted on October 23, 2002 | Type: In the News | Author: Paul Davenport
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PHOENIX (AP) - Proposition 303 on the Nov. 5 ballot would raise an estimated $62 million a year to help pay for health care for poor Arizonans, subsidies for hospital emergency rooms and research into leading fatal diseases.

Smokers would pick up the tab - if Arizona voters approve the referendum's 60 cent increase in the state's current 58 cent excise tax on each pack of cigarettes, for a total of $1.18. Taxes on other tobacco products would go up as well.

For a pack-a-day smoker such as Barbara Wells, the increase would cost $219 a year.

Wells, a state government finance supervisor who said she's been smoking about 40 years, said the added cost could help motivate her to finally stop smoking. "I can't afford much more," she said.

The state's last tobacco tax increase - a 40 cent increase on the tax per pack narrowly approved by voters in 1994 - came after tobacco companies poured millions of dollars into an opposition campaign.

The issue was a hot topic leading up to the 1994 election, but that's not the case this year with ads for three competing gambling initiatives and a heated gubernatorial race dominating the airwaves.

Supporters of Proposition 303 have raised a $1 million warchest, chiefly from hospitals and anti-smoking groups, but the tobacco companies are not matching that effort this time.

Instead, opponents are mounting low-key efforts largely consisting of releasing position papers and making representatives available to reporters for comment.

Supporters of Proposition 303 include hospitals now picking up the tab for unreimbursed emergency care and state officials who want extra money to pay for a voter-approved increase in eligibility for the Arizona Health Care Cost Containment System.

Also, supporters say, the higher tobacco prices will reduce usage by simply making cigarettes and other tobacco products too pricey for some potential buyers, particularly juveniles.

"For me, the problem is secondhand smoke. There's a lot of reasons from a pediatrician's standpoint to fight (for) this," said Robert Cannell, a Yuma pediatrician and state representative who was a prime author of the referendum.

Opposition to the tax increase comes from a conservative think tank, the Goldwater Institute, and at least one tobacco company, Phillip Morris USA.

Those critics say the tax increase, if approved by voters, will encourage many smokers to buy cigarettes from alternate sources, rather than in-state retailers, to save money.

Those sources could include bootleggers who smuggle in cigarettes from low-tax states, Internet suppliers and retailers in other states, they say. The result could be fewer sales for Arizona retailers and ultimately less revenue for the state for health care and other programs, the critics say.

Also, said Jamie Drogin, a spokeswoman for New York-based Phillips Morris USA, "we do feel it is unfair to single out smokers - a small percentage of the population - to fund services for a larger percentage of the population."

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