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Cigarette Tax Hike Back On Table

Associated Press

Gov. Mitch Daniels has strongly signaled that he is considering a second consecutive push to increase cigarette taxes when lawmakers convene in January, but some top legislators are skeptical of the idea.

In an interview with The Herald-Times of Bloomington published Sunday, Daniels said his top legislative priorities would be to continue enhancing the state's fiscal health and pursuing education initiatives, including full-day kindergarten.

He also said health status would be an issue.

"It's my intention to go at this in a fairly large way," he said. "The starting point is to bring our cigarette tax to the level of other states. Our cigarette tax is the lowest in the Midwest by far." Indiana's tax is now 55.5 cents per pack.

When announcing earlier this month that state government ended the fiscal year with a surplus, he said it took any need for tax increases off the table. But he amended that after a reporter's question, saying he would be open to higher cigarette taxes.

He said if he did propose that, it would be made solely with hopes of reducing smoking. He made the same claim in proposing increases of 25 cents per pack last session. But it failed to clear an initial House committee controlled by fellow Republicans and vanished as an issue.

A telephone survey of more than 5,600 Hoosiers released in May showed smoking rates had risen from 24.8 percent in 2004 to 27.3 percent last year, ranking Indiana second in the nation behind Kentucky in the percentage of smokers. That was up from seventh place in 2004.

State Health Commissioner Judith Monroe said when the survey was released that Indiana had not followed the lead of other states in boosting cigarette taxes, which she said tends to discourage smoking.

The state last raised cigarette taxes in 2002, from 15.5 cents per pack to 55.5 cents per pack, to shore up the state's finances.

Two top GOP fiscal leaders, House Ways and Means Chairman Jeff Espich, Uniondale, and Senate Tax Chairman Luke Kenley, Noblesville, suggested that the chances of a cigarette tax increase passing next session were slim unless the extra revenue was tied to health programs.

The administration said last session that a 25 cent increase would bring in $115 million to $150 million a year.