By Rob Moritz
Arkansas News Bureau
LITTLE ROCK — A conservative think tank is urging Arkansas voters to speak out against a proposed increase in the state’s cigarette tax.
Rep. Gene Shelby, D-Hot Springs, and the anti-smoking organization “Step Up Coalition” have suggested raising the tax by at least 50 cents per pack and using the revenue to pay for a new statewide trauma system estimated to cost $25 million to $30 million annually.
The rest of the revenue — a 50 cent tax hike on a pack of cigarettes would generate about $71 million annually — would possibly fund other health-related items, including the annual $3.5 million operating cost of the proposed Northwest Arkansas campus of the University of Arkansas for Medical Sciences.
In a “call to action” letter e-mailed to 500,000 subscribes last week, Washington, D.C.-based FreedomWorks, led by former Republican Congressman Dick Armey of Texas, said cigarette taxes are regressive, unfairly burden the poor and often do not generate the revenue promised.
“States often see taxing smokers as the path of least resistance as a small, unpopular minority of state residents,” the letter said. “But, it’s time that more people started resisting, take action, and tell your lawmaker to oppose the slippery slope of so-called sin taxes.”
Shelby, an emergency room physician, said Monday he had not seen the letter but knew there would be opponents to any proposal to raise the tax on cigarettes.
“I know it’s going to be a controversial thing,” he said. “I certainly feel strong about (this), much more so in terms of the positive public health benefit of raising the cost of cigarettes.”
Shelby said raising the tax on cigarettes will not only generate the money needed to fund a trauma system, but studies also have shown it helps reduce the number of teenage smokers.
“Many studies have shown that for every 10 cents you raise the tax you see a 5 percent to 7 percent reduction in smokers and up to a 10 percent reduction by teenagers,” he said.
A 50-cent hike in a pack of cigarettes would generate about $71 million annually, said George Foy with DF&A’s Economic Analysis and Tax Research. A 75 cent per pack of cigarette tax increase would generate about $96 million annually, and a $1 hike would generate about $115 million a year.
Shelby said a 50-cent tax increase would easily fund a statewide trauma system and the rest could be divided between programs to fund community health centers, the Breast Cancer Control Program, the Prostrate Cancer Foundation, and the $3.5 million UAMS has requested to open a satellite medical school campus in Fayetteville.
Northwest Arkansas lawmakers said recently that opening the satellite medical school campus would be a top priority during the 2009 session.
Matt DeCample, spokesman for Gov. Mike Beebe, said Monday that the governor is willing to consider raising the tobacco tax to fund a trauma system and other health-related programs.
“It makes sense that the conversation about the trauma system and UAMS satellite campus, which are two health-related programs, would be tied together,” he said. “The governor is open to any discussions.”
DeCample said Beebe expects opposition to a tax hike on cigarettes, but he downplayed the FreedomWorks letter.
“It’s a form letter from a Washington, D.C. political action group that doesn’t have much insight into what is actually going on in Arkansas,” DeCample said.
FreedomWorks spokesman Adam Brandon said Monday the group opposes tax increases and routinely notifies its subscribers when a state is considering raising the tax on cigarettes, alcohol, soft drinks or anything else. He said more than 500,000 people subscribe to the conservative think tank’s Web site. He did not say how many subscribers live in Arkansas.
Arkansas is among several states looking to raise the taxes on cigarettes to generate additional revenue, many of them because of the slowing national economy.
