Some states hooked on higher cigarette taxes. `Sin' taxes appeal to legislators facing budget pinch

Tobacco is increasingly becoming addictive - to states that need to raise tax revenue. Just ask Massachusetts Gov. Michael Dukakis. In order to raise $40 million, he recently took cigarettes off the list of items exempt from the state's sales tax. This added 7 cents to the price of a pack of cigarettes.

So far this year Iowa, Texas, and Michigan have joined Massachusetts in making smokers pay more. In the last two years, 14 states and the District of Columbia have raised their cigarette excise taxes. Twenty states now have excise taxes above the national average of 20 cents a pack.

In Oregon, smoking foes circulated a petition to increase the excise tax on cigarettes there by 1 cent a pack, with proceeds benefiting college athletics. This ``jock fund'' initiative will be on the November ballot, and if it passes, will tax both cigarettes and alcohol.

Californians collected more than 1 million signatures on petitions putting a similar initiative on the ballot this fall. The California proposition, coming on the heels of a legislative defeat to raise the tax, would increase the price of cigarettes 25 cents a pack. The tax increase would fund smoking prevention education, health care, fire prevention, and environmental programs.

Municipalities are joining in as well. The New York City Council, which passed a tough smoking ordinance this year, recently asked the state legislature in Albany for approval to raise city taxes on tobacco.

There is also a proposal before Congress to raise the federal excise tax from 16 to 41 cents a pack.

``When states come down to the wire [at the end of a legislative session], they impose `sin taxes' on products such as alcohol, cigarettes, and gasoline, even though these have not been proposed throughout the session,'' says Angela Mickel of Tobacco Free America, a nonprofit organization in Washington, D.C.

Exceptions to the trend are the tobacco growing states.

Ann Meyer, Virginia's Department of Taxation public information officer, says there has been no move to raise Virginia's excise tax of 2.5 cents a pack, nor is there likely to be a significant increase. It's a similar situation in North Carolina.

Part of the reason for the trend toward higher tobacco taxes is the recent shift in public perception of smoking.

In the past, it had been considered an unpleasant habit. With the release of recent reports by the US surgeon general, however, it is now recognized as a health risk and an addiction.

In Washington state, for example, a legislator, Dr. Art Sprenkel, says, ``I am looking at antismoking legislation that would include an additional tax on cigarettes that specifically addresses [their] health effects.''

This is the reason US Rep. Michael Andrews (D) of Texas on June 3 introduced a bill to increase the federal excise tax to 41 cents. Congressman Andrews says the purpose of his bill is to discourage smoking, primarily among young people.

But it also holds a wider appeal, since 90 percent of revenue raised by this action is aimed at reducing the federal deficit. It will be more than a puff: over a five-year period, he projects raising over $19 billion with the tax. Even so, it is considered a long shot for passage this year.

One reason the tobacco industry will fight passage of the bill is because higher taxes snuff out cigarette sales. When the federal excise tax was doubled in 1983, the industry sold 34 billion fewer cigarettes than in 1982.

However, the tobacco companies, which report record sales every year, raise prices to make up for the lost volume. According to the Tobacco Institute, the average price of a pack of cigarettes in the fiscal year ending June 30, 1987, was $1.10 a pack.

``We feel wholeheartedly that teens shouldn't smoke, but a tax increase to discourage them from smoking also places unfair burdens on adults who enjoy smoking and choose to smoke,'' says Gary Miller, assistant to the president of the Tobacco Institute, which represents the major cigarette manufacturers in the United States.

``Public information has been very effective and is the best way to discourage teen smoking,'' Mr. Miller adds.

But antismoking advocates maintain high excise taxes are a good way to discourage teen smoking. Ed L. Sweda, a lobbyist for the Group Against Smoking Pollution (GASP), says the cigarette price increase will deter 9,000 adolescents from taking up smoking. And, a Dukakis spokesman, Dave Wood, reasons that the governor's recent move to end the sales-tax exemption on cigarettes is fair ``because health care costs are elevated by smokers....''

Even as cigarette taxes are rising, some antismoking activists are raising questions about relying too heavily on such taxes.

Joe Weller, the state program director of the American Lung Association of Oregon, reasons: ``The time has come to be careful about feeding the bureaucracy with a cigarette tax because as consumption decreases, so does the revenue from smoking, and legislators might be hesitant about taking measures to finally eliminate smoking, because of the revenue they would be losing.''