The Jindal administration has floated the idea to lawmakers for the coming legislative session that begins in April, as part of the Republican governor’s proposed rewrite of the state tax code.
Anti-smoking groups are cheering the apparent turnaround, saying it’s past time that Louisiana — where tobacco taxes are among the lowest in the nation — boost costs to discourage smoking. The state has higher numbers of smokers than the national average.
“We are definitely encouraged by the governor’s proposal to increase the tobacco tax, since a $1.00 increase would prevent 35,800 kids from becoming addicted to smoking and save 21,900 Louisiana residents from premature smoking-caused death,” said Andrew Muhl, a spokesman for the American Cancer Society in Louisiana.
Jindal’s point man on the tax code revamp, Tim Barfield, is including the idea of a tobacco tax hike as he devises a package of proposals that would get rid of Louisiana’s personal and business income taxes and raise the state sales tax.
“We are willing to consider this and other changes as part of a larger effort to eliminate the income tax in a revenue neutral way,” the governor’s press secretary Sean Lansing said in a statement.
Louisiana’s state tax on cigarettes is 36 cents per pack, far below the average $1.48 charged around the nation, according to data from the Campaign for Tobacco-Free Kids. Only two states have a lower tax rate: Missouri and Virginia.
Talk of a cigarette tax increase from the governor’s office is a striking turnaround from 2011, when Jindal vehemently opposed a 4-cent-per-pack cigarette tax renewal, calling it tantamount to a tax increase because the levy was otherwise set to expire.
Jindal vetoed the $12 million-a-year tax renewal, though it had support of two-thirds of the state House and Senate. Lawmakers then tacked the tobacco tax extension onto a constitutional amendment that didn’t need Jindal’s approval and that won backing from voters in a statewide election, with the dollars dedicated to health care. So, the 4-cent tax remained on the books.
The difference this time, according to the Jindal administration, is that any dollars generated by a tobacco tax increase would be used to help offset the loss of revenue from eliminating income taxes.
Jindal’s office says the whole tax rewrite will be “revenue neutral,” not increasing state income or shrinking it. The governor has unveiled concepts of the tax code revamp, but offered few details of how the pieces will fit together.
Lansing wouldn’t say how much the governor is proposing to raise the cigarette tax.
Muhl said anti-smoking groups are seeking a $1-per-pack increase on cigarettes and corresponding rates for other types of tobacco, which would raise an estimated $223 million annually.
The organizations, however, want the dollars earmarked for health care programs, rather than flowing into the state’s general fund for any use.
By MELINDA DESLATTE