By John Lyon
Arkansas News Bureau

LITTLE ROCK — In a packed conference room Tuesday, Gov. Mike Beebe signed into law a nearly $86 million increase in the state’s tobacco tax to fund a state trauma system and other health programs.

Act 180 of 2009, formerly House Bill 1204, will raise the tax on a pack of cigarettes by 56 cents and increase the tax on smokeless tobacco products starting March 1.

The measure directs revenue from the tax increase to the General Revenue Fund. Sponsors say the money will fund a statewide trauma system, community health centers, in-home care for the elderly, expansion of the ARKids First children’s health insurance program and operating costs for a Fayetteville campus of the University of Arkansas for Medical Sciences, among other programs.

“We’re leapfrogging other states in education improvements and we’re doing well in this environment in attracting investment and economic development, but one area we were not making any huge progress in was health care,” Beebe said. That was “the one area we were not able to greatly address,” he said.

Beebe said matching federal Medicaid dollars will be available for some of the programs to be funded by the tax increase, bringing the total in new dollars for the state to about $175 million a year.

Putting together a trauma system will take time but should be done within a year’s time, Beebe and state Surgeon General Joe Thompson said. Hospitals can start applying soon to become trauma centers, Thompson said.

The trauma system will cost about $28 million a year, according to the governor’s figures.

Beebe credited House and Senate sponsors, Rep. Gregg Reep, D-Warren, and Sen. Tracy Steele, D-North Little Rock, along with House Speaker Robbie Wills, D-Conway, with helping obtain the three-fourths majorities in both chambers the tax increase needed to pass.

Steele said the governor played a major role in getting the bill passed.

Though lawmakers and health care professional began working on the legislation two years ago, after a trauma system bill failed to get out of committee during the 2007 session, the bill did not gain momentum “until the governor stepped out, stepped up and supported this,” Steele said.

Steele and Rep. Gene Shelby, D-Hot Springs, have filed matching Senate and House bills to set up a trauma system.

Beebe said his office and the Legislature will now have to focus on making sure the revenue from the tax increase is properly appropriated.

“One of the things we have to ensure is that we do what we said we were going to do and make sure that these funds go into the right appropriation pots, the right agencies, the right bills, so that the money is expended exactly like it was sold,” he said.

The current state tax on a pack of cigarettes is 59 cents. With the increase, Arkansas’ tax will still be below the national average of $1.19 per pack.

The state tax isn’t the only increase smokers will see, however. The Legislature approved the increase less than a month after Congress passed legislation to increase the federal excise tax on cigarettes by 62 cents a pack.

——–
Stephens Media reporter Doug Thompson contributed to this report.