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Big Tobacco Fights Higher VA Cigarette Tax [02/12-4]

Excerpts from: Big Tobacco Fights Higher Cigarette Tax

By Jo Becker The Washington Post [02/12/04]


Tobacco companies and their allies mounted an organized counteroffensive Wednesday against efforts to raise Virginia's lowest-in-the-nation cigarette tax, reminding lawmakers of the leaf's rich history in the commonwealth and imploring them to consider the industry's contribution to its economy.

As states across the nation have increased cigarette taxes to balance their budgets, Virginia has refused to follow suit. But this year lawmakers are inching toward raising the state's cigarette tax of 2.5 cents a pack for the first time since 1966 as a way to help close a projected $1 billion shortfall in the two-year budget, a historic step that the tobacco industry fears could lead to a new round of increases across the nation.

The cigarette tax increase is viewed by many in the Republican-controlled General Assembly as far more politically palatable that a broad-based increase in the sales or income tax.

And that has made cigarette manufacturers nervous. Tobacco interests, regarding Virginia as a bulwark in their national strategy, have poured more than $3.5 million into state campaigns during the last four election cycles, and now lobbyists are flexing that political muscle in an attempt to kill or limit a cigarette tax increase.

The cigarette tax increase is viewed by many in the Republican-controlled General Assembly as far more politically palatable that a broad-based increase in the sales or income tax.

And that has made cigarette manufacturers nervous. Tobacco interests, regarding Virginia as a bulwark in their national strategy, have poured more than $3.5 million into state campaigns during the last four election cycles, and now lobbyists are flexing that political muscle in an attempt to kill or limit a cigarette tax increase.

Warner's plan, for instance, dedicates proceeds from the cigarette tax to programs for the mentally ill and improving the rates the state pays nursing homes and hospitals. A group including those homes and hospitals will begin airing TV ads Thursday aimed at pressuring wavering House lawmakers to vote for a tax increase.



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