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As budget crisis deepens, Florida lawmakers weigh tobacco tax

Sometimes the Legislature takes a while to embrace a new idea.

Take seat belts. For the past couple of decades, legislators have resisted calls to give police the power to ticket seat belt violators without having another justification to stop motorists.

Every spring, advocates of a tougher seat belt law, including doctors and law enforcement experts, say it would save lives and reduce insurance costs. But lawmakers say police have more important things to do, and the bill is defeated year after year.

For nearly as long, Florida legislators have refused to raise the cigarette tax, one of the lowest in the country at 33.9 cents a pack. It has not gone up since 1990.

But times change. The state is in the throes of its worst budget crisis in decades, and the Legislature is staring at another deficit of at least $3.5-billion in March.

Reading the tea leaves, or tobacco leaves, strong signs suggest that smokers could soon be paying more taxes to keep the budget in the black.

Senate President Jeff Atwater said Friday that "a review of our tax structure" is a necessary component of the 2009 regular session.

Senate Majority Leader Alex Diaz de la Portilla, R-Miami, says he believes a clear majority of senators will support a cigarette tax hike in the regular session.

"It's better to impose a cigarette tax than to cut vital services," he said. "We should at least have a conversation about it."

Not only is Diaz de la Portilla the Senate's designated vote counter, but he's also a smoker.

Gov. Charlie Crist and the House have been resistant to a cigarette tax hike, and the tobacco industry's influence in the halls of the Capitol should never be under­estimated.

But a clear majority in the Senate could persuade Crist to get on board, creating a 2-on-1 dynamic that would pressure the House to fall in line.

Some lawmakers support a cigarette tax increase as a way of altering behavior. They say it would discourage some people, especially young people, from smoking.

The tobacco tax issue is complicated by a competitive industry fight. Miami's Dosal Corp. sells its 305 brand cigarettes at below-market prices because it is exempt from a fee of about 45 cents a pack that's imposed on the Big Tobacco firms covered by the state's historic $11.3-billion settlement of more than a decade ago.

Dosal is known as an NPM, or nonparticipating manufacturer, and its market share is growing at the expense of its older and more established rivals.

So Big Tobacco might accept a tax if Dosal were charged a fee that would eliminate its competitive edge, and Dosal may support a tax only if it did not include a fee.

A $1 cigarette tax hike could raise about $750-million a year. But a more plausible scenario is doubling the tax to 68 cents or raising it 50 cents a pack.

In the current state of fiscal affairs in Tallahassee, that's still a mountain of money that could be dedicated to various health care programs. By April, the tax-averse Legislature might well decide that taxing smokers is one way out of a bad fiscal situation.

Steve Bousquet can be reached at bousquet@sptimes.com or (850) 224-7263.

As budget crisis deepens, Florida lawmakers weigh tobacco tax 01/09/09 [Last modified: Sunday, January 11, 2009 5:26pm]
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