Tobacco legislation watched closely
San Antonio Express-NewsMay 1, 2006
AUSTIN — They don't give much to candidates, but they do spend big bucks on lobbying. And for more than a decade, tobacco interests in Texas have managed to block a higher tax on cigarettes.
This year, that long-running effort by the powerful tobacco lobby may turn to ash.
A proposed $1-a-pack increase in the state's cigarette tax could well muster the votes to clear the Senate. It passed easily last week in the House.
If the proposal makes it through the Legislature and Gov. Rick Perry signs it, as he has indicated he would, Texas would become the 43rd state in the nation, in addition to the District of Columbia, to raise its cigarette tax since 2002.
"This is a national trend," said Daniel E. Smith, national vice president of the American Cancer Society, which supports the tax increase. "No one likes taxes but the one tax (lawmakers) say OK to is the cigarette tax."
If the plan is enacted, come September each cigarette pack sold in Texas would carry a whopping $1.41 state tax, with the increase adding an estimated $750 million in annual revenue for the state.
Texas' neighbors impose significantly lower taxes: Oklahoma's tax stands at $1.03; New Mexico's at 91 cents; Louisiana's at 36 cents.
Tobacco interests last year spent $1.4 million to and $2.9 million in Texas to pay 51 lobbyists, according to the watchdog group Texans for Public Justice.
A handful of tobacco lobbyists refused to comment for this story, leaving others to describe their efforts.
Rep. Mike Villarreal, D-San Antonio, said he heard from tobacco lobbyists "constantly, every day" as the proposal made its way through the House Ways and Means Committee, on which he sits.
"They'd call me on my cell, they'd drop by my office. They were out in full force," said Villarreal, who voted for the tax increase despite the pleadings.
Over the years, tobacco interests have succeeded in keeping the cigarette tax at 41 cents a pack by arguing, in part, that raising it would create enforcement problems for the state.
"Excessive taxes can create an incentive for tax evasion," said Bill Phelps, a spokesman for Philip Morris USA, adding that when taxes become too high, smokers simply make purchases over the Internet or travel to nearby lower-tax states.
He cited New York City, where municipal and state cigarette taxes combine for an eye-popping $3 a pack. One survey showed 70 percent of smokers there reported buying cigarettes from a low-tax seller at least once in 2004, he said.
Whether industry lobbyists will be able to sell arguments such as those to the Senate, which is set to debate the bill in committee today, remains to be seen.
For one thing, cigarette taxes appear politically popular in a country where smokers now make up no more than 23 percent of the adult population. (Contrast that to the early 1960s, when nearly half of all adults smoked.)
Smokers face a coalition of grass-roots activists with some considerable clout.
"We're outnumbered (in resources) but we've got armies of committed volunteers," said James Gray, a Texas lobbyist for the American Cancer Society. "We're outgunned but we've got good information."
Health advocates say that on average, for every 10 percent increase in cigarette taxes, there's a 4 percent decline in the number of adult smokers and a 7 percent drop in smokers under the age of 18, with underage smokers more sensitive to price increases because they have less money.
Tax-increase proponents acknowledge that its Senate passage is no sure bet and say some supporters are reading the fine print and having second thoughts.
Sen. Judith Zaffirini, D-Laredo, vice chairwoman of the Senate Finance Committee, and Sen. Juan Hinojosa, D-Mission, have long supported a cigarette tax increase, both opted against sponsoring the bill last week because the money wouldn't go for tobacco-cessation programs.
Instead, most of the money would be used to reduce property taxes.
"This plan would impact the poor without giving them the means to help them quit," Zaffirini said.
Express-News Database Editor Kelly Guckian contributed to this report.
